VSLA - financial liberation for rural areas

Juliette Gadjelou from Divo has been selling medicine for the last 8-something years. Lately, she’s done better and better and the explanation is simple:

– I sell traditional medicine which I buy from others. One day, I had the president of VSLA come by and ask if I wanted to join them. I wasn’t hard to convince so I said yes. Looking back, I can say that it’s completely transformed my life, says Juliette. 

After joining her local VSLA, Juliette has seen her income increase and her standard of living go up. Not just in some areas but across the board. 

– I’ve got meat to eat; I can solve my own everyday problems. I couldn’t always do that in the past; even the basic things were sometimes a challenge. And it was hard or even impossible to save up any money for myself. But now, I’m saving a little every month. 

Bank services where there are none

VSLA was started by the CARE International organisation in 1991. VSLA, short for Village Savings and Loan Association (French: AVEC; Association Villageoise d'Épargne et de Crédit), are small member-run organisations providing bank-like services to people in rural and marginalised areas. 

As these areas rarely have banks, VSLA provides an opportunity for members to safely save money, take out small loans and become more financially independent. From the start, they were designed specifically to help women as they are typically more financially vulnerable and/or have less authority and say in their households.

VSLA’s are usually made up of 20-25 members living in the same area. In Juliette Gadjelou’s case, the VSLA has 25 members. There are more than 30 different VSLA’s in the area, meaning hundreds of people – primarily women – are involved and benefiting from the services. 

As part of a research project with World agroforestry centre, SLU’s team visits a village. Here, things have developed in a positive direction, and not just financially. For example, women are now able to inherit farmland. That is often difficult or impossible in the Ivory Coast, where male heirs typically take over operations once an older relative dies. 

Borrow for peak periods

Laurence N’Guessan joined the VSLA one year after her friend Juliette Gadjelou. Laurence works in farming but before joining a VSLA, she had never run her own operation. 

– It was my sister who told me there was this coop thing called VSLA. I hadn’t farmed myself before I joined, but not I grow tomatoes and okra along with some other things. When it’s a busy period, I need more hands, so I’ll borrow a little from VSLA to pay their wages. I don’t have the money for that on my own, so VSLA has been very important for me, says Laurence. 

It’s a common thing for members to borrow to cover costs for parts of the year. For many farmers, this means they’re able to ”accelerate instead of braking” which obviously enables them to turn a higher profit. 

Just like her colleagues, Laurence is very pleased with her membership and what VSLA has enabled her to do personally. 

– When I think of VSLA, I just feel joy. Education here isn’t free of charge, and my kids are big – two are in university and one is graduating high school. By paying into VSLA I can get a loan when I need to pay tuition. That has been incredibly important for the whole family, says Laurence. 

The safe box

Members of a VSLA hold recurring meetings and pool their savings. The money is then used as a bank account from which any member can borrow – at an interest rate set by the group. The savings are usually kept in a safe box with keys held by several members. The safe cannot be opened without every key holder present. 

Some VSLA’s also have an emergency fund to help members should a crisis arise, like a death or a natural disaster of some kind. 

Empowering females

The advantages of VSLA are many, but perhaps most importantly that they give rural people access to basic banking services. As most members are also women, they can also be seen as empowering females by letting them take greater responsibility and control over financial decisions and gain a stronger role in their households. A VSLA is also built on community solidarity and can work as a platform for discussing other societal challenges. 

Most VSLA members are women, many of them married. Yvonne Yaboué, member for four years, was tipped off by her husband. Yvonne is not only a farmer; she does a little of everything. She feels the VSLA membership has been crucial for her to achieve a higher standard of living, with less stress. 

– I do a lot of different things. There’s the farming but I also run a restaurant and work extra in childcare. The membership has been very important, especially when it comes to my private economy. I bought my first own piece of land with a VSLA loan, says Yvonne. 

Other voices

Ipote Toutoukpé has a long background in farming. Mainly she’s farmed cassava which she’s also refined in various ways. Since a few years, she’s specialised in refining. 

– I’ve stopped farming myself and only do the refining. My farm was destroyed unfortunately, and it was replaced by a palm oil plantation. 

Ipote is a veteran of VSLA and has been a member for about ten years. She appreciates that she and the others are able to help each other, and that no-one needs to feel ashamed if they’re going through tough times.  

– The best things about VSLA are that I can keep my kids in school. When you’re in a VSLA no-one needs to know your secrets. You don’t have to let people know if you’re poor. You solve all your own problems. I bought my own land with a VSLA loan and now I’m saving up for my own house. 

Funding

SLU’s trip to the Ivory Coast was funded with grants from SLU Global and Vetenskapsrådet, from the project Gender equality and climate resilience of West African cacao-dependent households (VR 2023-05955).

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