Saving Is Best Option For The Poor– VSLAs Expert Advocates

Pix of VSLAs Elsewhere in Africa

An expert in the formation and management of Village Savings and Loans Associations (VSLAs) Apam Leticia, has recommended money saving as the best option for the poor and vulnerable to enable them disentangle themselves from poverty. 

According to her, with regular savings, the poor and vulnerable who have no capacity to borrow money from the bank, are able to depend on the little that they save over a long period of time to start a small or medium enterprise and with determination, grow bigger with the little profit accrued from sales made.

Speaking to Savannahnews on the sidelines of a two-day job and entrepreneurship fair in Tamale, Ms Apam also urged Ghanaian youths to begin to save part of the little money that they get from parents or earn from work they do for people, so that they can start a business of their own.

She noted that in this 21^st century, entrepreneurship is the best option for young people who want to be successful and rich, and not through employment offered by government, corporate institutions in the private sector or fraud. 

VSLAs are groups formed by the poor to provide sustainable and profitable microfinance services especially in remote places with no access to formal financial services. 

VSLAs are self-managed groups that do not receive any external capital and provide members with a safe place to save their money, acquire small loans, and obtain emergency insurance. They focus on building savings and assets, and provide credit proportionate to the needs and repayment capacities of the borrowers.

Groups are low-cost, simple to manage, and can be seen as first step for people to reach a more formal and wider array of financial services. VSLAs often raise the self-respect of individual members and help to build social capital within communities, particularly among women. 

The concept was originally developed in Maradi, Niger by Care International in 1991 and has spread to 33 countries in Africa, three in Latin America, and seven in Asia. Currently, there are almost three million VSLAs active participants worldwide. 

Mrs. So Abapa Boateng, YEfL

The job and entrepreneurship fair organised by non-governmental organisation Youth Empowerment for Life (YEfL) under the theme: “Alternative Ways of Business Financing; The VSLAs Approach”, brought together 75 youths from the Kumbungu, Savelugu-Nanton and Tamale Districts.

Field Officer of YEfL, So Abapa Boateng, observed that it is very difficult for young people who are beginning life to raise capital to do business due to lack of collateral and other commitments demanded by financial institutions. Thus, the fair she said, aimed at teaching the youth about the essence of saving money, and also encouraging them to adopt the VSLA approach of raising capital to do business. 

Meanwhile, Mrs. Boateng was hopeful that, with the knowledge and expertise acquired from the fair, many of the participants could become financially independent and successful in future if they put it to good use.