These recent manuals arose out of the need to simplify loan record-keeping.  The main characteristics are:

• The group does not have to charge interest, but can just subtract payments from the previous balance.  This makes the method Sharia compliant

• If interest is charged, the total interest to be paid over the life of the loan is added to the amount borrowed at the time of disbursement. The total is then paid down over the loan period, whenever and in what amount the borrower decides. This is done within fixed time periods of 1, 2, or 3 months. Tables to calculate interest are provided in the manuals, reducing the risk of arithmetic errors (especially when using a calculator)
  

• Because interest is added up-front, there is no need to re-calculate interest at monthly loan meetings, which is otherwise necessary if groups are using flat or declining balance interest.  Thus loans can be disbursed and repaid in ALL group meetings, which means that there is no need for a lengthy monthly loan meeting, since the few loans disbursed and repaid in a weekly meeting are fewer than those disbursed and repaid in a monthly meeting
  

• Because record-keeping is simpler, the model is suited to areas of low literacy and reduces training and supervision needs

Important note: If you decide to use this model, but do not see your country included here, please contact VSL Associates (hugh@vsla.net), in order to have us adapt the service charge (interest) calculation tables to your country. This is needed because some currencies (such as the Tanzania shilling to the $US) have very large numbers, while others (such as the Ghanaian Cedi) have much smaller numbers. There is no charge for this service.  In the English files attached below you will find manuals adapted for 13 countries. These are:

1. Bangladesh
2. Ethiopia
   
3. Ghana
4. Kenya
5. Lesotho
6. Malawi
7. Mozambique
8. Nigeria
9. Rwanda
10. Sierra Leone
11. South Sudan
12. Tanzania
13. Uganda
14. Zambia

Village Savings and Loan Federations are 'groups of groups'. They consist of clusters of between five to ten VSLAs. Their principal function is to mobilise additional savings from individual VSLAs, so that any VSLA in the Federation can request either a 3 or 6-month loan to increase the value of its loan fund, when extra capital is in demand.

Working with Plan Tanzania, Oxfam Nigeria and the Nigeria for Women Project (NFWP), we offer a simplified, standardised approach to federating VSLAs, using meeting procedures and systems based closely on how things are done at the VSLA level. This has been successful, with over 250 such VSLFs, recording high rates of return and capital formation in Tanzania and more than 100 such VSLFs in Nigeria, where Oxfam has successfully adopted this model, which is integral to their long-term programme strategy.

The manuals that we attach are in English and French and cover not only the formation and functioning of VSLFs, but changes that are needed at the level of member VSLAs in order to mobilise funds to invest in the VSLF, but also to repay loans.

Many mature projects have reached a point at which they want VSLA members to think about how to select, plan and manage income-generating activities (IGAs). There are a number of training models that do this, but the SPM model, originally developed in Bangladesh by CARE, took a different approach. It differs from other models in the following ways:

• The enterprise is understood not to be 'stand-alone', but part of the family economy in which capital and labour are moved from one activity to another as priorities dictate
• It makes no distinction between fixed and variable costs, but bases profitability estimates on trading/manufacturing/service cycle
• It requires careful profitability analysis but doesn't lay emphasis on complicated book-keeping

It is based on the following main modules

• Knowledge, skills and time availability
• Markets and customers
• Income: is the IGA profitable?
• Sources of capital
• Does it meet the need for household income in the right amount and better than alternatives?

For the moment this manual is only available in English.