SDG Village Savings & Loans Associations : Saving for a brighter future…November 24, 2015
Through the School Demonstration Project, African Revival has now trained VSLA groups at all 15 schools involved in the project and provided savings kits to the groups, including logbooks to keep track of their loans and savings, and a lockable savings box. The aim of the VSLA savings scheme is to instill a savings culture amongst the members of the SDG and increase financial security at a household level. Many SDG members have never had formal bank accounts and have no other way to save their money. VSLA trainings increase skills in financial management, and also encourage members to establish personal saving goals, which vary according to the problems that they prioritize. Some intend to use the savings and loans system to invest in their businesses, boost agricultural productivity or pay medical bills, while others want to pay their children’s school fees. Whatever their goals, the VSLA provides members with a secure way to save their money, enabling them to better meet their immediate and future needs.
Olaa Amilobo VSLA
The VSLA at Olaa Amilobo Primary School is now in its 11th week of saving, after forming in August 2015. The group is formed of 53 members, who also make up the Parent’s School Demonstration Garden. Most recently, members have undergone VSLA training to instruct them in proper financial management techniques, such as how to keep a record of savings in their logbooks.
And the training has paid off; the group has so far saved a grand total of 930,000 Ugandan Shillings (£170). Not bad for 11 weeks of work! The group has also introduced a fine system, where members are penalized 500UGSH (10p) for late arrival, absconding from farming duties or poor quality work; so far a total of 55,000 (£10) has been accumulated from fines, which has been added to the savings. Members can also take out loans from the VSLA, which are calculated by multiplying the amount a particular member has saved by three. Members pay 10% interest on these loans.
Through the VSLA, group members have established personal savings goals. Many intend to use profits from the garden, and the resulting savings, to pay their children’s school fees. Indeed, Headteacher Julia Acheng identified late payment of school fees as one of the main problems faced by the school, but believes that the VSLA will help to mitigate this challenge:
“If the money is already there, I can’t see the reason why they will refuse to pay. I think that one [the VSLA] will be of great help”
SDG member and VSLA Secretary Joseph Gim agrees. He has already taken a loan to pay his daughter’s school fees, and says now he is able to meet his needs, including a rather unexpected one:
“I am able to meet them [needs]. Because with that money that I’m taking from there, I’m able to buy all the things, school fees, food and mattresses”
Because home comforts are important too! He also has plans to take a loan in the future to increase his agricultural productivity at a household level:
“In the future, I hope to use a loan to buy cows from the Masindi. Some to feed the children, some I need to go with to dig the garden. I’m doing it now with a hoe. So with a cow, it will be easier and take less time”
The VSLA is providing Joseph with the means and motivation to better manage his finances, allowing him to meet his children’s needs in the present, and plan for the future.