Financial Inclusion #4: It Takes A Village Savings & Loan Association

Financial inclusion is about inviting those trapped in systemic poverty to participate in the local economy. It’s about creating opportunities for people who have been marginalized in their communities. They can acquire new skills and access financial services that help unleash their potential to build a sustainable livelihood and provide for their family. 

Financial inclusion is about inviting those trapped in systemic poverty to participate in the local economy. It’s about creating opportunities for people who have been marginalized in their communities.

In the Dominican Republic, ASPIRE is our Implementing Partner. They operate an NGO and a Cooperative Bank called CoopASPIRE. One very inspiring program is called Aspiring Together, which invests in those at the bottom of the economic ladder, providing training, micro-leasing, and other initiatives to help clients acquire a sustainable livelihood. One effective methodology within the program is the Village Savings & Loan Association (VSLA).  

We left the capital city of Santo Domingo, driving into the countryside. Exiting the highway, dodging a few car-sized potholes, we eventually arrived in a small village with dirt roads and a mix of homes made of wood, concrete block, and tin roofs. Over the afternoon we were privileged to meet with two VSLAs with about 24 women in each, as well as a separate group for teens.  

A VSLA is a community group of 20 or so clients, usually women. They meet weekly to make a small deposit and learn new skills. Deposits are kept in a secure box requiring three keys, each key kept by a different leader.  Funds in the VSLA can be lent out to members (or others) earning interest revenue for the group.  At year-end, proceeds can be paid out or reinvested in the next round.  

There is so much that happens within a VSLA.  Members learn the importance of saving, even a small amount of their weekly income. Members benefit from being able to borrow from the fund (an early form of microfinance), with group accountability resulting in a high repayment rate. Members become part of a support community – no longer marginalized. And, with ongoing training provided by other group members or external sources, members build new life skills, increase their financial literacy, learn how to run a small business, and gain confidence. 

The discipline and determination of the group members were inspiring. And the two amazing ASPIRE staff members who accompanied us are working hard to set up these groups across the country. Suleyka said that she is highly motivated to help women find alternative income sources because she knows that often the alternative is prostitution. The ASPIRE staff love their jobs and are fun, inspiring, and amazing leaders. 

The discipline and determination of the group members were inspiring. And the two amazing ASPIRE staff members who accompanied us are working hard to set up these groups across the country.

VSLAs are also used in Haiti as part of the Pathway to a Better Life program, and clients who graduate from the program remain members of the VSLA, providing ongoing training, support, and community. And this methodology is also used in programs we support in Ghana and Columbia.  

The fight to irradicate global poverty will require a lot of different approaches, and in part, it takes a Village Savings and Loan Association. 

Dan Murray, CEO