URI Women's Initiative in MENA news: “Women on the Move” workshop on the Village Savings and Loans Association (VSLA) manual to provide rural women with the knowledge and skills that would enable them to establish and raise a Mutual Fund.
By Ms. Rasha Maher, URI Cooperation Circle Liaison Officer in Egypt
URI Middle East and North Africa (MENA) conducted a two-day workshop under the name “Women on the Move” on how to establish and manage a Mutual Fund using the "Village Savings and Loans Associate" model for improving women’s access to financial resources in Seflak, a village in Sohag (South Egypt).
The workshop is a continuation of the URI Women's Initiative in the MENA region, which was launched in 2013 under the theme "Women’s Economic Empowerment." Ms. Rasha Maher, URI Cooperation Circle Liaison Officer in Egypt, organized this workshop in cooperation with Women Rural Development Association at Seflak (Saqulta District, Sohag).
The target group was rural women with limited or no access to financial resources, some illiterate, 19 to 60 years old.
It is worth mentioning that URI Women's Initiative in MENA has conducted several workshops designed to empower women through building their capacity, including five workshops on “small startup business project management” in Jordan, Morocco, and Tunisia, as well as one for Syrian refugee women in Jordan.
The activity is about providing a practical training on the methodology of a Village Savings and Loan Association (VSLA), which is a transparent, structured and democratic version of the informal savings groups found in villages and slums in many parts of the developing world, where a group of people who save together and take small loans from those savings. The activities of the group run in cycles of one year, after which the accumulated savings and the loan profits are distributed back to members. The purpose of a VSLA is to provide simple savings and loan facilities in a community that does not have easy access to formal financial services.
Below are the details of the workshop:
Workshop duration: two days, on 17 and 18 of November 2017.
Target group: rural women with limited or no access to financial resources. The women are illiterate and literate with average education, aged between 19 to 60 years old.
Number of participants: 27 women.
Location: Seflak Village, Sohag Governorate.
The purpose of the workshop: to enable rural women with the needed knowledge and skills to establish and manage a mutual fund that will provide them with simple savings and loan facilities, in a community with little access to formal financial services and resources. The idea behind this training is to establish a Mutual Fund (an investment vehicle made up of a pool of moneys collected from many members of the village to be used by them against low interest under VSLA methodology). The people of the village will pool their savings by buying shares in a Mutual Fund, and when they have put in an agreed amount they can qualify for a loan to start a small business or meet a sudden cash need (e.g. school fees). The interest paid on the borrowed funds is returned and shared out among all the members. A social fund (Takaful) may also be established which is interest-free.
Expected Results: By the end of the training, the women become independent and manage their own savings, credit and insurance activities.
The 1st day:
The training started with presenting some quotations about the importance of savings and giving definition for Village Savings and Loans Associations, which is based on a very widespread idea in the community, called "Gamaia" or a society, but the saving idea is more organized and has many components rather than the financial component. The aim of the VSLA is to provide an opportunity for the poor to have access to the financial services to supply their needs in an easy and constant way in addition to causing a social change.
The different between VSLA and the traditional "Gamaia" or association was addressed. Also, the training tackled the reasons why people should or shouldn’t save money, then illustrated the components of the VSLA:
- Social fund (takaful)
- Group work
- Interactive education
The VSLA methodology:
A group of people (15 – 25 individuals)
- They choose to work with each other (how?)
- They operate their own association (how?)
- The association lasts for 9 months to a year
- They make work regulation and system
- They establish their own social fund (Mutual Fund)
- All the association members save money through buying shares.
The training shed the light on the advantages of VSLA and explained VSLA maturity phases and illustrated the VSLA tools.
The 2nd day:
The day started with a practical example on the VSLA work regulation and system and the group wrote their own regulations and chose the group name "Tomorrow is Better" and elected their management committee: the group leader, the registrar, the treasurer, the 1st counter and the 2nd counter. Also, the key keepers who save the 3 keys for the lock-box were nominated.
They decided the outlines for their VSLA and stared practically using the lock-box, their passbooks and saving money together. The VSLA agreed to gather on Saturdays in the association to have some social activities and to save through the purchase of shares. The group is autonomous and self-managed, this promotes self-reliance and long-term sustainability
The VSLA offered women, in particular, a safe way to save money and access loans. No outside capital was needed. Only a lockbox, three keys and the financial training they had and they are on the way to turn their financial independence into better lives — for themselves, their families and their community.
See more photos on the URI MENA Facebook page.