BENEFITING: Choose Humanity
“There is no force equal to a woman, determined to rise.” -W.E.B. Dubois
There are so many smart, creative, resourceful people living in poverty in developing countries that have the skills and the entrepreneurial mindset to start successful businesses and income-generating activities, but they often don’t have access to the needed start-up capital. Taking out a loan from the bank is usually out of the question because there either is no bank in the area, or they can’t afford the high interest rates charged on loans from the bank. In addition, many living in poverty do not have experience or training with managing their money, budgeting, or the principle of savings. When you feel like you don’t even have enough money to cover your family’s daily living expenses, you understandably don’t think the principle of saving money applies to you.
In July of 2013, 30 women from the rural village of Buhkaweka in Eastern Uganda met to form a Village Savings & Loans Association (VSLA), and in the past four years, eyes have lit up with understanding as to why the principles of savings and budgeting are important and how they are possible no matter your income level and living circumstances. This group has been meeting weekly since its inception four years ago, and three other groups have been created that were modeled after the first and trained by the women in the original group. They have each been officially registered with the local government and have been commended by the government as a model for all other communities.
These women have overcome challenges and worked together to maintain the smooth and successful operation of their VSLA’s, and each member has been positively impacted by the outcomes of these efforts. By developing a culture of savings (and establishing a means to save), many have been able to start or expand businesses, pay for their children’s school fees, purchase livestock, build homes for their families, buy new clothing, and even purchase luxury items like lotions and hair products with their surplus savings. Lives have been changed, and it’s exciting to see the enthusiasm of these women and to stand back and marvel at their success, especially as their efforts expand to more and more in the community.
To celebrate the efforts and the success of these women and to give them an extra push in the direction of their dreams for the groups, my goal is to grant 1 million shillings ($275) to each of the four VSLA’s. This grant money will be added to each group’s loan fund, which will allow more women to be able to take out loans simultaneously, have access to larger loan amounts, or provide funding to support the development of a group business which the women have expressed interest in establishing to continue promoting the growth of their VSLA and because they see the individual benefits that come from working together.
This is a story of self-reliance, of sustainable community development work at its finest, and of empowered women—wives and mothers and daughters and sisters—who are changing their lives, the lives of their families, and their community. And I can’t think of anything I’d rather celebrate! Please join me in following their example by pooling our own resources together and cheering them on—providing them with encouragement, major kudos, and a supportive push toward their continued success!
*These grants will be presented to the women of each VSLA by a team from Family Humanitarian Experience (FHe) on Friday, July 28th in conjunction with trainings on business development, budgeting, and financial management.
For those who are interested, here are the very basics of how this VSLA model works: The model for this savings and loans group is based off one that has been used in developing countries around the world. The operations of the group are very transparent and secure so that the members will trust the system, which aims to protect against any corruption. The groups are made up of 30 members who meet once a week for a year. The members determine a minimum and maximum amount of money that each member must save each week. This money is kept in a lock box that is locked with 3 padlocks. Each week, one member takes the box home and three different members each take one of the keys home. These responsibilities rotate each week. Every 4 weeks, members are given the opportunity to apply for loans from the group. A member can take out a loan of no more than three times the amount that she has individually saved. This loan must be paid back within 3 months, plus interest. The interest rate is previously determined by the group and written in their constitution. At the end of the year, members receive their savings back plus interest. The group may immediately begin a new year-long cycle, but any members who wish to leave the group are welcome to do so. (It should be noted that the grant money raised through this fundraiser will not be divided and paid out at the end of the annual cycle, but will stay in the group’s loan fund in perpetuity.)