VSLA

Over the past few months I’ve helped form a support group for people who are living with HIV. When I first meet the people who became the founding members of the group they told me about the wide variety of problems they face. While the issues are extremely varied, poverty was an overarching force. Poverty kept them from being able to buy medications that help fight opportunistic diseases. Poverty makes it difficult to send their kids to school (all schools, including the free government schools, charge fees). Poverty keeps nutritious, but expensive fruits and vegetables out of their reach leaving them with bland and repetitive diets lacking in vitamins and minerals. Poverty results in not having money for transport when they get very ill and need to go to the hospital in Gulu. Not shockingly, poverty makes every aspect of life harder.

After some consideration and failed attempts at addressing other issues we decided that what the group needed was a VSLA- a Village Savings and Loans Association. Millions of people around the world don’t have access to appropriate banking systems either as a result of their remote location, illiteracy, or lack of finance (most banks expect their clients to have a certain amount of money and financial activity that might not be realistic for everyone). VSLAs are banking on the village level. A group of 15-30 people meet at a given time and date (usually once every week or two) and, using a set of rules decided by the group, save and loan money. Each group member can ‘buy’ between 1 and 5 shares per meeting. My groups have set the cost of each share to be 1,000 shillings- about 40 cents. The savings, along with records of the transactions, are stored in a strong metal box at the treasurer’s home. The box has places for 3 individual locks and 3 different group members hold the keys to ensure that no one has access to the money outside of the meetings. Members are able to take loans out of the group savings with a monthly interest rate of 10%. I have been told by my father, a banker for 40 years, that 10% is an insanely high interest rate and would be illegal in the U.S. BUT there is a benefit for the members. After the savings cycle ends (about 1 year) the group divides the money in the box according the number of shares that each person has bought. Because there are no external fees to pay and the biggest expense is the cashbox, the average return on savings is between 30-60%, also insanely high according to American standards.

Not having any previous experience, I was thankful that there’s a ton of literature on VSLAs which allowed me to start the program with my group. Unfortunately, we still had a ton of challenges. The biggest issue that we faced was that my group members were just too damn understanding. In order for a VSLA to function you need to have no more than 30 members and they need to come consistently. Every training meeting that I held seemed to be comprised of a completely different group of potential members. We discussed this issue every time and every time their leading spokes person, Dorcus, would say that we needed to give people another chance, they’d be there next time.

One day I finally hit my breaking point. Because of the inconsistent attendance I had to continuously teach the same material at the meetings and I was starting to loose faith in the fact that it would ever come together. I spoke with them in very candid Lango. “Jo pe kan, kob WOT!” “The people who aren’t here, tell them to GO!” I asked if they would let someone run up and steal their money as we were sitting there and explained that they were doing exactly that by allowing people who didn’t bother to come steal an opportunity from them. They got it. Two weeks later they managed to divide into two groups (30 members each) and we officially started saving.

In the end, the point that we needed to hit was that I needed to lay off the rules a little bit and they needed to start following them. What they needed to understand was that we never would have gotten started if they continued to accommodate people who didn’t make a commitment. What I needed to accept was that a lot of the absences from the meetings were both understandable and unavoidable. Members consistently miss meetings because they have to go get medications from various NGOs, they have appointments to have their CD4 count tested, or they’re sick- a lot.

Over time we’ve reached a mutual understanding- I’ll make sure they know which rules are flexible and which aren’t and I trust that they will take them in and make them work in a way that fits their situation. I’m FINALLY happy to say that we’re makin’ it work.