Establishing Village Saving and Loan Associations in Uganda
450 million micro and small businesses make up over half of the world’s economy, many of them in rural poor communities. As a large part of the world’s population does not get access to banks due to lack of collateral and other reasons, they also have no access to affordable loans to grow their businesses.
In Uganda as in many other countries around the world, it can be difficult for people in rural regions and of poor socioeconomic background to access traditional banking services. Micro and small businesses therefore cannot do not get the opportunities that big companies get, to credit and markets and thus have less trust.
In order to enable poor rural communities access to loans to build and grow their businesses, YESS Impact has initiated the formation of village saving and loan associations (VSLAs) in rural Uganda in collaboration with a well established local partner in 2020. The YESS VSLA model consists of small local groups which meet weekly to save money together with the option to get loans from the group to build or expand a business.
The members get trained in financial literacy and business planning and also have the chance to exchange about their needs. In addition to the savings, the YESS VSLA groups develops an emergency fund to support each other in times of extreme need (sickness, death etc.).
The success stories of the project are significant and it has been shared on major stages and conferences. People take development into their own hands, supported by their peer group. They learn sustainable finance and business skills and grow their businesses which help the communities.