When you hear ‘economic empowerment’ you mind might be tempted to think about numbers, books of account, transactions and ledgers. What most of us tend to forget is that it is all about people, relief and most of all it is about hope and the pursuit of happiness. Most of the time what people really want is an opportunity, a fair shake at life and hope. When you look in to the faces of the people we serve you can see the harsh realities of life, but looking closer you will see determination, courage and resilience. These are people who have the same desires as the rest, they want to be empowered and contribute towards their communities.
Meeting Mama Amina
“I will never forget the day I joined the savings and loan group, because that was the day my life changed for the better, I can now manage my life without having to depend on others as was the case before. My livelihood as well as that of my group members has changed, for me it is more than just saving money, it is truly an investment, a way building a better future for my family.” These are the words of Amina Ibrahim, a 42-year-old single mother of seven children who lives in Belethawa, Gedo Region, Somalia. In the town, the majority of the people are pastoralists and small holder farms who are highly dependent on rain fed agriculture, most residents do not have access to microfinance institutions that can bail them out in case of shocks.
Dressed in the traditional Somali attire she gets out of her small grocery shop with her arms wide open and welcomes us the best way a Somali mother can, and that is with a hot cup of tea. Her grocery store is full of fresh fruits, vegetables, basic goods and other household items. The store is the main source of her income and it is what gives her joy everyday she opens it up for business thanks to the support she has received from the savings and loan group.
Village Savings and Loans Group
Village Savings and Loan Association is a group of people that save together as well as take loans from the savings they have made. The activities of the groups run mainly in cycles of 1 year after which the accumulated savings and loan profits are shared among the members. The main purpose of VSLA is to provide savings and loans to communities that normally do not have easy access to formal financial services.
Amina joined a Village Savings & Loans group called Wadajir, to help her save and borrow loans that could help her. The group started operating in 2018 and has been a platform for members to save and borrow loans ever since. It started with 20 members and has increased to 25 members over the course of the year. “Trust and reliance on each other is what keeps us going. We meet once a week and sometimes I save $5 or $7 depending on what I can afford that week. I never thought that being a member of a Savings & Loan group could be this useful and bring about positive changes in my life.” says Amina.
Savings Impact
Before she joined the Village Savings & Loan group, Amina had a small table, placed in front of her home, where she sold tomatoes & onions. She had a few customers. Usually, during the cycle of the saving group, each member gets the privilege to take a loan from the accumulating savings of the group with strict conditions. Amina, had the opportunity to borrow $200 dollars, which she used to expand her business.
“I expanded my business, got more stock. After two months I managed to repay the loan to the group. For the second cycle I received $300 in savings share-out, I have now shifted my business to the main market. I sell vegetables and other items. My life has changed completely! I even look different” says a smiling Amina “I am happy, my efforts are keeping my family and I well, we eat better and live better all because of my small business.” Amina added.
Amina is now able to pay school fees for her first-born son who goes to a private school and buy books for the rest of her children who attend public school. “We now eat three meals a day and I save $25 every month with Wadajir Savings group” says Amina. “I am happy that many women in my community are now capable of maintaining a good living standard and can pay for their children’s school fees” She adds.
Going Forward
When the VSLA concept was introduced to Amina by DRC at first she couldn’t understand it and it was difficult for her to save any money because she earned very little, however through several business skills training she took to it like a duck to water and today she is an inspiration to her fellow group member and the community. She has now vowed to empower more women and pass it on.
Today we live in a world where people are described using numbers, how much they have saved, how much they earn, how much they contribute. However, it is ultimately about stories like Amina’s, stories that give hope, that empower that tell real tales of how simple concepts like VSLA are changing people’s lives forever for the better.
Quick Facts
- DRC established Village Savings and Loans Associations (VSLA) and linked them to Micro-finance institutions.
- The VSLA Savings Group is a community-based, self-managed savings and loan structure tailored to the needs of Somalia’s resource-poor literate and non-literate women and men.
- The VSLA offered an alternative to formal banking institutions and local money lenders (Hawalas) who demanded too high repayment rates on quicker terms.
- Based on principles of trust, transparency, and flexibility, they instill among members a discipline of saving regularly to then access low-application fee loans throughout an agreed-upon 12-month cycle, while saving up a large sum accessed at the end of the cycle, called the “share-out.