Some of the happy created saving group collecting their money together ready for loaning back to their members who needs the money for borrowing.
Over 2 billion adults worldwide do not have access to formal financial services. The majority live in developing countries and are unable to set up bank accounts because they have little money, there are no banks nearby, they are unable to complete the paperwork or because they aren’t aware of the benefits. People who do not have access to financial services are much less likely to save money and are therefore less likely to have the resources to keep their children healthy, safe and in school. Village savings and loans associations (VSLAs) are self-created and managed groups that do not receive any external capital and provide people with a safe place to save their money, they access small loans, and obtain emergency insurance. The approach is characterized by a focus on savings, asset building, and the provision of credit proportional to the needs and repayment capacities of the borrower. Groups are low-cost, simple to manage and serve as a first step for people to access a more formal and wider array of financial services. VSLA is based on small groups of 15 to 30 members who mobilize savings, use their revenue as a source of loans to members who wish to borrow and usually operate a small insurance fund to address emergencies. All this is done according to carefully developed procedures, which most groups master after a year of training and follow up. Through CARE, USAID WA-WASH is using the VSLA platform to engage communities on gender issues, technology transfer, sanitation and hygiene campaigns and water user pay education.