A Village Savings and Loan Association (VSLA) is a group of people who save together and take small loans from those savings. 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. Over the past decade, VSLAs have attracted attention among development partners and governments. The VSLA approach is a well organized and accountable system that even the least literate, least influential member of the group can understand and trust. The system is very simple; but the results are powerful. The promise of VSLAs lie in their ability to empower people to work their own way out of the poverty trap, while avoiding dependency and handouts from aid. Numerous studies have found substantial positive impacts of participation in VSLAs, specifically in the areas of eradicating poverty, promoting children’s education, improving health outcomes for women and children, and empowering women.[read more=”Continue Reading..” less=”Less”]
Having these benefits in mind, PRIME supported Private Service Providers (PSPs) for the formation and expansion of VSLAs through the PSP model, which was selected because of its cost effectiveness and sustainability. PSPs train VSLAs, for a fee, paid by the VSLAs, eliminating the need for long-term external technical support. The main advantage of this approach is that new VSLAs continue to be created (and supported) after a project has ended.
The approach was started early in the month of July 2014 by providing eight days induction training for PSPs across all PRIME intervention areas. The PSPs are expected to transform individuals into effective VSLA by organizing, communicating, and paying attention to how the group members work together. PSPs create an environment of respect and safety, encourage active listening, and help groups to plan and monitor. PSPs are help to ensure the success of the VSLA. They help participants to understand their own self-interest in joining a VSLA. PSPs build awareness and confidence among VSLA members so that they adopt the system, keep it within their control, and work independently.
As of the reporting period of Quarter 10, the number of groups formed Via PSP approach across three clusters reached 232 with total members of 4,390 (68% are women) respectively. On top of these, value of saving reached 1,155,012 (ETB) and value of loan outstanding is also about 305,450 (ETB) respectively.
The groups also save social fund for emergency loans or grants to take care of unexpected and urgent needs, during weekly meetings or in between. The total social fund balance also reached 212,780 (ETB). The social fund is to address social issues such as emergency assistance, educational costs for orphans, funeral expenses, maternity, etc. these prevents members from VSLA members in Kebribeya Woreda unexpected shocks during disaster and overcomes shortage of money to cover unexpected situations.
Mercy Corps is also using the Management Information System (MIS) to conveniently track a variety of VSLAs data established via Private Service Providers (PSP) approach across all clusters. The SAVIX MIS will help to know which Private Service Providers are performing the best and which Private Service Providers are performing the worst. Additionally, it helps to track the data or status of VSLAs and it supports to take corrective action in improving their performance. Please click the link to download the success story, VSLAs Savings Exceed 1.1 Million Birr[/read]
The use of power from wind turbine benefits not only entrepreneurs but also community members
Electricity access in Ethiopia is very low even by African standard. The World Energy Outlook 2010 estimated national electricity access at 17 percent in 2009. Access in the rural areas of the country is even lower.Abdulahi Osman is a resident of Hadew kebele in Fafan zone of Somali Region, which is an off-grid kebele. The main source of livelihood for Abdulahi’s family is growing maize and retail trade. Abdulahi says there are different business opportunities that people in the locality would like to engage in if it had not been for the two barriers to income generation: lack of access to electricity and financial services.Undaunted by these barriers, Abdulahi started a retail business of sugar and rice with 1500 birr (USD 75) capital a few years back. Through hard work and support from his family, Abdulahi managed to be the major provider of fast moving goods in his village. He then expanded his business by providing mobile phone charging services through a small lantern. Although there was a high demand for this service, Abdulahi couldn’t do the charging in the evenings due to the low capacity of the lantern.[read more=”Continue Reading..” less=”Less”]
The support of a USAID project, Pastoralist Areas Resilience Improvement through Market Improvement (PRIME), changed that. In line with its objective of promotion of renewable solar and wind energy source to pastoralist households, PRIME partnered with a company called Wind Empowerment to promote small Wind Turbines for rural electrification and job creation. Through the partnership, PRIME constructed a wind turbine, and installed it in Abdulahi’s shop. At a capacity of over 1kW, Abdulahi is now able to charge 30-40 phones a day unlike a maximum of eight before the installation, generating an average additional income of 2500 birr (USD125) a month. He is also enjoying 24 hours of power. He says, “I feel like I am the “Power house” of the neighborhood”. Moreover, he bought a refrigerator, which resulted in an increased demand of soft drinks. The increased demand for his goods and services, requires more labor, and Abdulahi’s wife is helping with the selling activities. Together, they are planning to expand their shop space to be able to charge more mobile phones and start a barber service.
PRIME trained 20 polytechnic college graduates to scale up the benefits that these locally manufactured small wind turbines are giving to the community both in terms of job creation for young graduates and provision of access to electricity for productive/domestic use. Moving forward, the project plans to promote the uptake of small wind turbines after analyzing income per household and willingness to spend on energy services.Please click the link to download this success story, Installation of a Small Wind Turbine Increases Income [/read]
|Pastoralists obtain better income from the sales of their animals thanks to VSLAs|| Evaluations of the Village-level Savings and Loan Association (VSLA) model suggest that participation in the program has an overall positive impact on various indicators of members’ wel-fare, including the development of income-generating activities (IGAs), education expenses, access to health services, nutri-tional levels and quality of housing. In the light of these findings, PRIME facilitates the formation of VSLAs under the Private Sector Provider (PSP) approach, which eventually cpacitates the private provider to run the VSLAs through member contribu-tions, and VSLA members to be able to pay for the service. The PSP approach complements the VSLA model by ensuring sus-tainablity and circumventing reliance on donor funding. One of such VSLAs is found in Golicha village, Did Yabllo Kebele, Yabello Woreda in Boena Zone of Oromiya Region. The asso-ciation, which has 25 members was formed 11 in August 2014. The group meets every month and everyone saves 12 Birr. Ten birr goes to savings while two birr goes to a social security fund, which is used to support each other during a crises.Karru Nura, a 50-year old widow, is one of the members of this group. She is keen to tell what exactly a VSLA membership has benefitted her. Just a couple of months ago, Karru had to send money to her two children who are at the university (one in Haremaya and in Jimma). She didn’t have cash at the momemt. The price of cattle and goats was rather low then. Karru bor-rowed 2,000 birr (USD 100) from the credit group. In a seven weeks’ time, Karru sold a cow at a good price and repaid her debt. By doing so, she has saved a lot of money, at least 1000 birr (USD 50) by her estimation. “I am just telling you an in-stance,” says Karru; “otherwise, membership of this association has several benefits. After all, it has instilled the culture of sav-ing in us. We think twice before spending our hard earned money.” Before this association, whenever people ran into a small financial need, they sold their animals; often, at a very low price. The money left over was often spent unwisely. Even if some people wanted to save, they had to go to the nearest bank in Yabello town, which is not so friendly to community members who can’t read or write.
Pastoralist Areas Resilience Improvement thorough Market Ex-pansion (PRIME) project has so far facilitated the formation of more than 96 VSLAs across Borena Zone, benefitting over 2050 households and enabling them to increase their capacity to generate income, meet their immediate cash needs and con-trol their financial resources.
Please click the link to donwload this success story, VSLA Membership Contributes to Resilience
“membership of this association has several benefits. After all, it has instilled the culture of saving in us.” Karru Nura VSLA member, Golicha village
|An entrepreneur’s business using solar system increases income and creates jobs||Lack of access to energy poses several challenges to residents of rural pastoral Ethiopia, affecting their livelihood tremendously. For example, they cannot operate devices like cell phones, preventing real-time communication and making emergency response extremely difficult. People are forced to use kerosene or firewood for lighting houses at the expense of the environment, health and assets.The business of Dawd Wako, a resident of Borbor Town in Oromiya Ethiopia, is helping pastoralists tackle power issues. Dawd started the business of charging mobile phones in 2009 because he had to fend for himself. With the money his parents raised for him (3,500 birr/USD175), Dawd bought a 60-watt solar system and started to receive mobiles for charging. His excitement didn’t last long, however. Due to lack of knowledge and skills to install and operate the solar system, Dawd couldn’t charge the phones. He had to make several trips to nearby towns and even to Kenya to get the phones charged, and to buy batteries which were breaking down due to improper installation and handling. Dawd’s operational cost was so high that he was about to throw in the towel. Fortunately, a rare opportunity opened up for Dawd in 2013. The USAID-supported project, Pastoralist Areas Resilience Improvement through Market Expansion (PRIME) worked with Dayod Engineering Plc to deliver a 10-day training in solar energy to him and 69 other entrepreneurs, who learned not only how to install solar panels but also how to use and maintain them.That training turned around Dawd’s business. His batteries stopped breaking down. “As for maintenance,” Dawd says proudly, “I’m the expert in solar systems around here.” Today, his income from mobile phone charging is more than 6000 birr (USD 300) a month. Moreover, he promotes and sells Dayod Engineering’s so-lar products to pastoralists for a commission of 10 percent. Dawd has also opened up a butcher shop, which is earning him more than 12,000 birr (USD 600) a month and he is planning to open a restaurant soon. Recently, Dawd hired two employees who sup-port him with the mobile phone charging business. Each earns 600 birr (USD 20) a month. On the whole, Dawd has come a long way. His business has not only changed his life but touched the lives of others, and has become a resource person for his kebele, of which he is proud.PRIME works to significantly improve alternative livelihood options through essential skills transfer including basic employability skills, and entrepreneurship and technical training. Dawd is just one of thousands of young women and men for whom PRIME has facilitated training in these areas.Please click the link to download this success story, Skills-based Training Provides Reliable Access to Solar Power|
“As for maintenance, I’m the expert in solar systems around here.” Dawd Wako, Mobile phone charging service provider