A village saving and loan association (VSLA) is a group of people who meet regularly to save together and take small loans from those savings. The activities of the group run in cycles of one year after which the accumulated savings and loan savings are distributed back to the members. The purpose of a VSLA is to provide simple savings and loan facilities in a community that does nit have easy access to formal financial services.
For every water security and food security project, SASOL uses an integrated approach which involves direct service provision, skills development and VSLA component. The VSLA component is a supplementally support service for enabling local communities meet immediate basic financial needs like, purchase of inputs and seeds, medical care, and educational materials. The communities that we target are the poor and vulnerable who have no collateral or linkage to commercial financial institutions. The VSLA and table banking are acceptable group regulated initiatives that mainly depend on communal and ethical values. Currently SASOL is working with 50 VSLA groups whose operating capital range from ksh.20,000 to 200,000. These groups are mainly composed of 20-50 members with 75% being women. With Covid-19 pandemic, VSLAs have become a critical household coping mechanism for survival. Covid-19 has contributed to loss of economic opportunities and with the guidelines on limited movement, household finances have been constrained thus increasing the vulnerability of the effects of the pandemic. The modal doesn’t require collateral as security for the loan but the group use communal and ethical control systems to mitigate against default.
A co-operative has been formed in Lower Yatta which helps farmers located in that area sell their produce collectively. Farmers are linked to potential buyers and service providers who buy the produce at a higher price compared to the current price when farmers sell directly to the market or sell individually.read more