A Village Savings and Loan Association (VSLA) is a group of 15-30 people who save together and take small loans from those savings. The activities of the VSLA run in ‘cycles’ of about one year, after which the accumulated savings and profits are shared out among the members according to the amount they have saved. PALM Corps introduced the concept of VSLA in the group through implementing the Finance for Agriculture project (F4A). The group adopted it early 2017 with the aim of promoting the culture of savings and investments among the members. VSLAs are created so that people can save, borrow and start an insurance.

Kwatabango farmers group of 63 members in Zombo district, which is a savings and producer group, saw it relevant for the group to promote a savings and investment culture among members in order to increase economic and social security of the group.

“I have easily coped with unexpected emergencies and I could invest in my onion business through my own savings and social funds I received from the VSLA.”
Mr. Janega Innocent, the group chairperson.

The VSLA operates on the basic principle, that members of a self-selected group form an association and save money, which is the source of loan capital from which they can borrow.

“I have been able to buy assets and pay for predictable expenses using the loan I borrowed from the group. As a group, we agreed to save and borrow as we wish from the accumulated savings of the association for a limited period of time”
Mr. Alionyanya Ambo Martin, Kwatabango group member.

Agribusiness field officers from PALM Corps together with Community Based Trainers (CBT) introduced the concept with coaching and mentoring on records. The purpose was to create community-managed savings and loan groups that belong to their members.

“With the good record management, we have been taught to save regularly, to take short-term (3-months) loans from the savings, and to share out the savings and profits. This has taught me to keep records of all activities I do. In addition, the social funds also provides us with grants when we encounter serious problems. The VSLA is now our village bank that helps us to save and to borrow”.
Mr. Onencan Abdu, Kwatabango group member.