VSL Associates - who we are

VSL Associates is a group of independent practitioners, working to spread the Village Savings and Loan (VSL) Savings Group (SG) model worldwide.


Since 1991, working mainly through NGOs, we have helped millions of poor people access and manage their own basic financial services that are:

  • independent
  • self-managed
  • transparent
  • self-financing
  • accessible
  • secure
  • profitable

How VSLAs differ from MFIs

Different services for different people

While Micro-finance Institutions (MFIs) stress credit, because interest income is their main source of revenue,  it is savings that improve household cash-flow management and are a better fit for the poorest: no-one ever complained of having too much savings.

The assumption that poor people want business credit more than other financial services is NOT true. Research from FinScope studies in Africa (www.finmark.org.za) shows that the majority of loans go to meeting basic needs and mitigating crises. But, the poorer you are, unless you have the income to pay back, loans often increase indebtedness.

Why do the poor prefer VSLAs?

Typical clients of MFIs are the owners of established small businesses, who want to borrow to increase business turnover. MFIs are mainly found in urban areas, where lending is profitable.

But the typical villager in a developing country is less interested in running a business that needs credit to expand. Although they benefit from loans, most Savings group (SG) members are risk-averse, and usually prefer to stabilise household cash-flow by saving instead of taking out loans that bring the risk of indebtedness. 

VSLAs are a type of SG that are local, self-managed, sustainable, secure and highly profitable.  They  are an effective way of helping even the poorest households manage their money more efficiently and staying out of debt..

How it started and current scale


There are an estimated 2.5 billion unbanked adults worldwide. By the early 1990s, it was clear that, to reach these people, a new model was needed that operated sustainably at very low cost: reliably offering the right products at the right price, on the doorstep. 


With their very low costs, informal traditional models were discovered to be the best way to achieve this, but could benefit from improved governance, standardised procedures and simple, transparent financial systems. 


Initiated by Moira Eknes in CARE's Mata Masa Dubara (Women on the Move) project in Niger in 1991, variations of this methodology now reach more than 20 million people worldwide, with about two-thirds using the VSLA SG model.


How and where do VSLAs perform?

What are VSLAs?

  • The Village Savings and Loan Association (VSLA) model creates self-managed and self-capitalised savings groups that use members' savings to lend to each other.
  • VSLAs are comprised of between 10 and 25 members and offer self-managed savings, insurance and credit services in urban slums and remote rural areas.
  • The model has spread to 77 countries with over 20 million active participants worldwide.
  • Spontaneous replication is taking place without the intervention of a project. On average, for each 'foundation' group in Kenya and Uganda, 2-3 years later there are two more groups, mostly formed by the members themselves, without formal training.

Worldwide performance

  • VSLAs operate independently, without additional technical support after 12-15 months.
  • 89% of groups continue to operate longer than five years after receiving training. On average they double their capitalisation and average loan sizes.
  • 78% of the members are female
  • At any one time the average group has 63% of members with loans outstanding.
  • At any one time 74% of the available funds are in loans.
  • The average return on assets is 18% and on savings is 22%.
  • To set up a VSLA programme, the cost per member averages $22 (and as little as $8, when delivered through a good local NGO).
  • 98% of members continue from one annual cycle to the next.

Are they here to stay?

VSLAs have transformed marginalised communities worldwide, mobilising local savings, which provide members with a means to cope with emergencies, help to manage household cash-flow, build a capital base and, crucially, re-build social networks, solidarity and trust. 

The micro-finance industry has come to accept the place of VSLAs as an important part of the financial landscape, recognising them as able to bring profitable and sustainable entry-level financial services to the rural poor, in their own communities, managed by themselves.  

Research in 5 countries over 5 years showed that 89% of VSLAs continue to operate and, on average, have doubled their capitalisation.

They are here to stay!