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VSLA: Village Savings and Loans Associations

VSLA BoxThe Village Savings and Loans Associations schemes were developed by Care International in 1991. Since then, they have been refined by an organisation called VSL Asssociates who have made all of their material freely available for download from their site

The power of the VSLA scheme lies in the way that it empowers community responsibility, encourages savings as well as loans, and repays interest which would otherwise be consumed in overheads back into the community.  It particularly lends itself to faith based communities, where the behaviours which would otherwise threaten it are naturally addressed through the teaching and sanctions of the church itself. 

Essentially, VSLA communities meet around a small steel money box (secured with three separate padlocks - see picture above), and consist of between 15 and 35 members, including 9 elected officers.  Each of the members invests what they can afford, but the person investing the most can only invest 5 times the amount of the person investing least, so that control and influence remains distributed.  People therefore join schemes which match their financial situation.  The 9 elected officers consist of three key-holders (for the padlocks), three money-counters (who triple-check things), a chairman (who manages proceedings), a secretary (who keeps the records), and a treasurer (who looks after the box).  The group agrees its rules and processes democratically when it is formed (including interest rates and the elected officers) and can agree a loan to any of its members (usually the agreed interest rate is either 5% or 10% per month in order to keep the accounting simple).  Quorate weekly meetings take place to enable further savings, loans, repayments, and subscriptions to the hardship fund. 

The scheme lasts for 12 months, at which time the loans are repaid in full, the money shared out and the records reconciled.  A new scheme can start immediately if sufficient of the group so wish, with new elections and a chance to review the rules and processes

To understand how to deliver training for VSLA schemes, please visit, sign on to their site, and download the latest 'Field Operations Manual' In it you will find guidance on the relevant training sessions to set up a scheme


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