Saving money, making change
In Volta, there’s a series of local banks opening up, but they won’t be run out of buildings because these banks come in a box.
Village savings and loans associations (VSLAs) are run for and by community members. The members, mostly women or low-income earners, receive financial training, pool their resources, invest in income-generating activities and begin to accumulate savings for the first time in their lives.
The impact this makes soon adds up.
In Volta, your support helped nearly 100 participants form 5 new VSLA groups.
Previously, only individuals confident in their financial knowledge would reach out to private lenders for – generally high interest – loans. Those who could not meet their payments would often use critical assets, like crop harvests, as collateral – making them even more vulnerable to the effects of poverty.
But, with your help, individuals across Volta have new financial skills and access to low-risk loans, within a safe and comfortable space. In fact, there has been such an interest in the VSLA initiative that independent groups have been inspired to pop up all across the region – and Plan-trained members are happily sharing their secrets for success.
“I access small loans from the VSLA for my mat weaving business ... The VSLA is always with us and I can rely on it when the need arises. For some time now, I have not gone to a neighbour to borrow money … We have developed expertise.” – Vero, Volta mother and VSLA member.
Making sense of this dollar-saving system
- $ Formation: Once the groups are formed, they develop their own constitution covering practices on things such as interest charges and late fees, and elect a managing committee.
- $ Meetings: They meet weekly or bi-monthly, each contributing agreed-upon amounts to the communal pot.
- $ Loans: When a member of the group wishes to secure funds, they apply by presenting a loan proposal and the group votes on whether to grant it.
- $ Interest: Interest percentages are mutually determined and contributed to the general pool of funds; once a certain sum of interest is accumulated, it is “shared-out” and distributed evenly among members.
- $ Mutual gains: “When they share out, it means everyone is getting some profit from it,” explains Rose, who works with Plan International in Ghana. “The money the members take is always used for something purposeful,” she says, noting that often they plan their cash-out to coincide with a certain time (e.g. prior to a period of heavy rainfall to purchase seeds for new crops). Some even use accrued money for a joint emergency fund, offering it to a community member in need during a time of financial crisis.
- $ Sustainability: Once they share-out, they reconvene and start a new cycle.
Community banks are open for business across Volta
“I learned how to conduct meetings and ensure transparency and accountability. I’ve learned how to save money for a rainy day.” – Rejoice, Volta local and VSLA member.
Cashing in on the benefits
- + Economic security
Members have savings to fall back on in the event of an emergency, allowing them to adapt to unforeseen circumstances, plan for the future and build resilience,
- + Financial independence
VSLAs provide members with self-reliance, build confidence, foster mutual respect and even contribute to enhanced status within the community.
- + Growth opportunity
Not only can individuals increase their earnings, they can become entrepreneurs or expand their businesses, which can yield even greater profits.
- + Personal development
Often VSLA’s receive training in topics like small-business start-up, management and financial literacy, helping families budget their households and entrepreneurs succeed within their chosen business.
- + Benefits families
VSLA groups can raise household incomes, providing additional funds for families to afford food and school fees, improving health and education,
- + Strengthens communities
VSLA groups unite community members, create economic opportunities, promote gender equality, diversify markets, strengthen local economy and improve overall quality of life.
“I have learned how to save, borrow and calculate interest. I have taken loans from the VSLA to procure raw materials to weave mats. The money I make from sales is what I use to cater for my personal needs and those of my family. Life is good.” – Juliet, Volta mother and VSLA member.
Thanks to you
VSLAs across Volta are encouraging increased self-worth alongside increased net-worth. They’re providing families with more funds and financial stability, ensuring children can capitalize on important chances and enabling the whole community to grow and prosper.
You’re generous sponsorship is making this community rich with opportunity, while doing a wealth of good.
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