4.2.11. Community Savings Groups, VSLAs, SACCOs
A Community Savings Group is a community-based lending program. A group of people in a community agree to save a certain amount periodically and deposit these savings in a group account. This money is then lent over the course of one year based on demand, after which the loans need to be repaid (Source: Savings Groups Empower Women in Sierra Leone). These may take the form of Village Savings and Loans Associations (VSLAs) or Savings and Credit Cooperative Societies (SACCOs).
- Appropriate capital to meet borrower needs
- Cash flow uncertainty
- Ease / cost of collecting payments
- Exchange rate risk
- Interest rate risk
- Potential for higher inflation
- Unpredictable fiscal policy
- Off-take risks associated with target sector/region
- Production costs associated with target sector/region
- Rate of return on lending in target sector/region
Addresses limited financial infrastructure where banking may be nonexistent or not trusted
MUST HAVE’S, CRITICAL POINTS, OR QUESTIONS TO CONSIDER
Achieving gender equity remains a challenge in Sierra Leone. Women are confronted with limited access to decision-making processes, and access to and control over resources. USAID promotes gender equality and women’s empowerment across sectors by focusing on improving women’s health, political, social and economic rights in Sierra Leone.
Through the USAID-funded Women Empowered for Leadership and Development (WELD) project, women in Sierra Leone benefit from entrepreneurship and basic arithmetic trainings, improved farming technologies and grants that enable them to manage complex and medium enterprises effectively, to engage in formal transactions, and to expand their agricultural activities.
Women now have access to loans and savings through the implementation of WELD Program; thereby increasing the financial independence of women and increased networking of women through regular meetings held by the loan groups and support to members from the social funds of the savings and loan group members. These significant investments boost production, processing, marketing and increase incomes and local economies.