VSL Associates is a group of independent practitioners, working to spread the Village Savings an Loan (VSL) Savings Group (SG) model worldwide.
We want to help millions of poor people access and manage their own, basic financial services that are:
Whom do VSLAs serve?
Typical clients of Micro-finance Institutions (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. Their main product is credit.
But the typical villager in Africa and Asia is less interested in running a formal business that needs credit in order to expand.
They are much more interested in avoiding risks associated with debt and give priority to stabilising household cash-flow though maximising savings and minimising debt.
Savings Groups (SGs), which are self-managed, sustainable, secure and highly profitable are the best way of doing this.
How it started and current scale
There are estimated to be 2.5 billion unbanked adults worldwide, who mostly live in remote rural areas. By the early 1990s, it was clear that, to reach these people, a new model was needed that operates sustainably at very low cost: reliably offering the right products at the right price, on the doorstep.
Building on informal traditional models was found to be the way to achieve this, along with improved governance, standardised
procedures and simple, transparent financial systems.
Initiated by Moira Eknes in CARE's Matu 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 2/3 using the VSLA SG model.
What are VSLAs?
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