What is VSLA?
Village Saving and Loan Association is small groups of people who save their money together and by turn make use of these saving as a loan. As this activity goes on, saving become more accumulated hence members can earn more profit. In comparison with conventional financial services, VSLA provides a relatively simpler procedure for loan applicants.
Informal ways of saving among groups has been going on for years in numerous parts of the world. VSLA provides a clearer way of loan payment. This is a flexible method which can easily be implemented in rural regions to empower the local people.
There is usually a committee member team which is elected every year by the members. The committee members have clear roles but not limited. This is to make sure everyone plays a role in the whole system.
Every group has around 15 to 25 members which voluntarily choose to be in the group. Every week the group members meet and they decide to purchase a share in order to save. The share price is determined by the group.
flexible saving scheme
Since the saving is flexible across the members, the system is very simple but is strong. The members do not have to save as much as each other. This allows the members with lower income to save more frequently though smaller.
All savings are accumulated in form of loan which members can borrow later. Each member can borrow as much as three times their individual savings. Loans are for a maximum period of 90 days in the first year and loans may be repaid in flexible instalments at a monthly service charge which is determined by the group.
Social loan is a new service that provides members with a basic form of insurance. This loan functions as a community safety and may serve is special occasions – such as emergency assistance – for the entire community which includes members and non-members. Social fund is not aimed to grow, but is set a level which covers basic needs.
The VSLA group does not use a complex accounting system. To record the individual saving and loan liabilities of the members, VSLA passbooks are used. This is appropriate for members with limited literacy. The Lock box contains the material, passbooks, loan funds and social funds which is safeguarded by the group box-keeper between meeting.
Swissjumprope as an athletic campaign, seeks to support women. Through the VSLA program which has been started by Care organization since 1991, you can read more about VSLA or start donating online through Care’s international secretariat in Geneva, Switzerland .