Enhancing Livelihoods in the Rural Savannah Zones of Ghana
Rural communities fringing the Mole National Park such as Murugu, Bawena, Wawato Kpulumbo, Yazori, and Grubagu are implementing an innovative idea that is increasing their financial capital and sustaining their livelihoods as well as households.
About the VSL Model
The Village Savings and Loans (VSL) scheme is a financing mechanism that is generating capital to support groups especially, women engaged in small-scale enterprises. It provides sustainable and profitable micro-finance services (micro savings, micro-credit and micro insurance) in remote places with no access to formal financial services.
The scheme was introduced into the communities by A Rocha Ghana (Northern Sector) in 2013 with technical support from World Vision-Ghana as a means of encouraging and promoting the culture of savings among rural women groups. It also aimed at addressing the challenges of rural poverty, which has been a driving force in the destruction and mismanagement of natural resources within the northern savannah landscape.
How it Operates
With a minimum of about 15-30 members in each group, an agreed daily amount per week is contributed into a fund. The group owned and managed scheme, provides each member with a passbook where individual contributions are recorded till the end of a contribution cycle (mostly 12 months). Security protocols are established by members of the group to ensure contributions to the fund are safe. Each daily amount within a week is denoted by a stamp (e.g. GH₵ 5 will have 5 stamps in case the share value is GH₵ 1 per day for 5 days). The contributions are managed such that, members have opportunities to apply for loans from the pull of funds with flexible interest rates that is payable within 3 months.
Averagely, these small groups are able to generate between GH₵ 8,000 to GH₵ 17,000 within a contribution cycle. Women in rural communities through the scheme, are now able support their children through school, expand their businesses, invest in acquiring farm inputs and generally, supporting their households.