Village Saving and Loans Association (VSLA)
Most of the people who live in informal rural and urban areas find it very difficult to access financial services. Banks don’t offer saving or credit services for poor people (Egypt banking penetration estimated at 10%).
Loans are costly and many people prefer to build their assets through saving rather than increasing their risk by taking loans. Women in poor communities don’t have many opportunities to get together and discuss the issues that affect their lives and their communities.
This is why Plan Egypt started the Village Saving and Loans Association (VSLA), an internationally applied methodology designed for underprivileged communities that lack access to formal financial services. Through economic and social engagement, the programme empowers its members to tackle community issues and become active citizens.
Through local organizations and volunteers, Plan promotes the creation of savings groups, mainly for women. Groups are made up of 10-25 self-selected members who meet once a week and save money through the purchase of shares. The group issues loans from the saving pool, based on the members' needs and for starting small income-generating projects.
Members also contribute to a social fund that can be used in cases of emergency. Throughout this process, members learn self-organisation, elections, decision-making, saving, money management, participating in income-generating activities and projects, exchanging experiences and addressing issues of interest.
VSLA is also implemented through the Banking on Change initiative which is a global partnership between Barclays Bank, Plan and CARE. Through this partnership Barclays is funding the programme and supporting Plan and CARE in the implemention.
Joining VSLA's increases the members' awareness, contributes to their empowerment and supports their solidarity.
So far, there are more than 60.688 members in around 4,633 groups, in which 78% of the members are women. They have been able to save 1,8 M LE and have issued over 3,000 loans. VSLA has proven to be very successful in empowering women who are now enabled to contribute to and take decisions about domestic financial issues.
Key Partners and Networks
- CDAs are our basic partners within communities.
- The Ministry of Social Solidarity and other governmental instituions.
- Barclays Bank and CARE International, Egypt.