Transcript VILLAGE SAVINGS&LOANS ASSOCIATIONS (VS&LAS)

VILLAGE SAVINGS & LOAN
ASSOCIATIONS (VS&LAS)
Welcome to the Partners
Conference – Shangai
Hotel, November 4th
2005
Organised by Financial
Sector Deepening
Uganda (FSDU) and
CARE International
What are VS&LAs?
• These are selfselected groups of
people, (usually
unregistered) who
pool their money into
a fund from which
members can borrow.
The money is paid
back with interest,
causing the fund to
grow.
VS&LAs cont’d
• The loans are used to meet their small,
short-term financial needs for income
generating activities, social obligations and
other emergencies
Names associated to the concept
• VS&LAs - Village
savings and loan
associations
• SLAs – Savings and
Loan Associations
• ASCAs –
Accumulating Savings
and Credit
Associations
SLAs are not!
• ROSCAs
• SACCOs
Origin of the concept
• Launched in 1991 by
CARE Niger as MMD Mata Masu Dubara
meaning “Women on the
Move”
• Built from the ROSCAs
but added many different
twists. Unlike the
ROSCAs, MMD
borrowers repay their
loans with interest
• Now implemented in over
15 African countries
How does the methodology work?
• Groups are made of
15 - 30 people
• Members select
themselves
• Based on own
savings and self
management
Methodology Cont’d
• Meet regularly
(weekly, fortnightly)
and saving per
meeting
• Save multiples of
minimum amount
• Short term loans
Cont’d
• Borrowers repay the loans with interest
• Cash box, three locks
• SLAs formed for a specific cycle (time
bound) usually 9 – 12 months
• At the end of the cycle, portfolio divided
equally among the membershipAuction Audit
Advantages
• Allow savings and loan access as often as needed
• Auction audit provide tangible incentives to the
members
• Interest earned remains in the group/community.
• Cultivate the culture of financial management of the
borrowers/savers
• The cost of running the activities is low i.e the cost
per member is between $15 and $25 per member
• The system of transactions is quick, simple and
transparent
Disadvantages
• Loan amount is small especially at the beginning
of the cycle
• Loan period is usually short and limits long term
investment
• Loan funds are not always available at
appropriate times
Thank you for coming and please
join us !