Village Savings and Loan Associations and Food Security: Exploring Linkages in Sierra Leone and Tanzania

As part of the Rural Agricultural Finance and Food Security (RAFFS) Practitioner Learning Program (PLP), Catholic Relief Services (CRS) and Floresta collaborated on a comparative case study to document the linkages between village savings and loan associations (VSLAs) and food security for rural clients in Sierra Leone (CRS) and Tanzania (Floresta). From March 2009 to March 2010, the two organizations collected data to explore the hypothesis that VSLAs can contribute to food security by increasing food availability (through an increase in agricultural productivity) and also by increasing food access (through an increase in household income).

To better understand the different linkages between VSLA activities and food security, CRS and Floresta analyzed their data through a number of different lenses including loan purpose, loan seasonality, loans and gender, loans and food security, savings share-out and group social funds. The results of this study demonstrate that VSLAs can, in fact, positively affect household well-being and food security in a number of ways.

In 2010, the number of undernourished people worldwide topped 925 million. Among the many factors responsible for this figure are high domestic food prices, lower household incomes, and increasing unemployment, all of which have significantly reduced access to food for the poor. Research has shown that a healthy agricultural sector can provide an economic buffer during financial crises. In addition, financial services responding to the food security needs of rural households can lead to more successful outreach and have a greater impact on the poor.