Thanks to Village Savings and Loans Association (VSLA), women and other vulnerable groups in Upper East Region, no longer travels to the south especially Kumasi and Accra to do menial jobs to earn a living.
“We used to travel to Kumasi and Accra to do menial jobs to enable us take good care of our children’s’ needs particularly their education and health,” says Mrs Christina Ndanbon.
She said: “But since the introduction of Village Savings Loans Association, we no longer go since we’re are able to take loans from the scheme to undertake economic activities.
We can now pay for our children’s education, their National Health Insurance as well as feed them very well. We thank World Vision Ghana (WVG) very much for introducing to us this good intervention.
The VSLA concept was introduced by WVG in the Talensi, Bawku West, Garu –Tempane and the Kassena-Nankana West Districts of the Upper East and West Mamprusi District of the Northern Region.
The Village Savings and Loans Association Concept
The VSLA is a village banking methodology, which offers the productive poor mostly in the rural communities, the opportunity to purchase shares and lend to themselves with agreed interest rate on group basis.
In the case of the Talensi District for instance the price of shares ranges from GH₵3-GH₵15. The capacity of the groups was built by WVG. Each time the group meets, each of the women purchase shares.
The Talensi VSLA is made up of 79 groups and a total of 1809 people from 15 communities. Each of the groups save together and take small loans from the money to embark on petty trading and other income generating activities.
The activities of the VSLA run in cycles of about one year, after which the accumulated savings and the loan profits are shared among the members according to the amount they saved.
Ghanaians culturally have the urge to save for use in times of need and the VSLA concept confirms this culture.
For example the use of money boxes for savings is a very old concept. The Fantes call it “Susu”. The idea is to use a box to collect money preferably coins over time and use the amount later. The Ewes call it “Adakavi” and in the Northern Region it is commonly called “Adashi”.
The same applies to the VSLA. At the group level, the savings made in the box are used as loans among members and repayments made at specific periods.
Although the VSLAs may not be formally registered, they have a considerably higher degree of formality.
It has clear and formalised systems of governance, enshrined in written constitutions, policies and procedures related to savings, credit and the operations of a social insurance fund, transparent procedures, effective but very simple systems of record-keeping, equitable distribution of assets on regular basis and effective security of records and cash.
The Impact of VSLA on the Welfare on Women and Children
As at 2014, the Talensi VLSA, which then was made up of 50 groups from eight communities netted savings of GH₵109,500 ($35,000)
Whilst some of the women have been able to establish new businesses, others expanded theirs and some engaged in buying foodstuff during the harvesting seasons to store and retail during the lean season in order to make profit.
Many of the women who spoke to the GNA confirmed that the intervention had improved upon their living conditions, particularly the wellbeing of their children.
“I was finding it difficult to establish my workshop for sewing after the training but through the VSLA, I was able to put up my shop with the GH₵ 500 loan I took from the scheme. Now I get more customers and can now pay for my children’s school fees including the premium of the National Health Insurance Scheme”, Mrs Patricia Ayine, a 25- year- old seamstress, said.
Mrs Janet Tibaheya, a 26- year hairdresser from Balungu, said her dream to get money to open a provision shop attached to her hairdressing business came true with the help of VSLA.
“Now I have two businesses all through World Vision Ghana intervention. For instance just this year, I was able to pay school fees for my two children in senior high school and support my husband in the upkeep of the family,” Mrs Tibaheya indicated.
With the intervention most of the beneficiaries had gone into petty trading such as selling of tomatoes, pepper, soap, shea butter processing, baskets and leather weaving, batik tie and dye, pito brewing and selling of foodstuff.
It is a common knowledge that women are the best managers of homes and they take good care of the family, particularly the wellbeing of children.
However one of the major challenges facing many women to play their roles very well as managers of home is lack of economic empowerment and the project has proven to be successful in addressing the issue.
Mr Fredrick Amoabeng, Area Development Programme Manager of WVG said the implementation of the VSLA in the Talensi District in October 2013 had made significant impact on the wellbeing of families particularly children and women.
He said that was the reason why the success story was extended to its operational areas including West Mamprusi District.
He noted that one of the major objectives of the VSLA concept is to help improve the entrepreneurial capacity of communities, inculcate the culture of savings and increase community access to credit to embark on income generating activities to diversify and sustain their livelihoods.
“WVG is happy that most community members in its operational areas can now have access to credit, which they can use to start and expand their businesses. It has installed in them the spirit of savings. It has brought social cohesion and cordiality among families, groups and community.
“Through the savings and the loans, group members are now able to contribute to the welfare of the family especially food, health insurance and children’s education “, Mr Amoabeng added
Mr Samuel Abassiba, Manager of WVG in charge of the Farmer Managed Natural Regeneration, said the groups capacities were built around group dynamics and the VSLA model as well as setting up and management of small businesses.
He stated that VSLA is a poverty reduction tool as it makes loans available for rural people who could not have access to conventional financial institutions to engage in petty trading.
“It is an effective method of helping poor communities to mobilise funds to support their small businesses,” he said.
Conclusions and Recommendations
Viewing the impact of the contributions of VSLA towards the economic empowerment of rural women, there is the need for more organisations, particularly state institutions such as the regional coordinating councils, metropolitan, municipal and district assemblies to help empower rural women by supporting them to get organisations that have the expertise to build the capacity of more women particularly in the rural settings to start the process.
The authorities in the Northern, Upper East and Upper West Regions must exploit the concept to help alleviate poverty and to curb the upsurge of rural- urban migration in the area.
By Samuel Adadi Akapule