Earning an Additional Annual Income through VSLA

Under a tree in Nwan, a farming community in the Upper East Region in Ghana, there is a group of women who come together every week to make savings. Their Village Savings and Loan Association (VSLA) was established in October 2013 and recently facilitated its first share-out. During this meeting, the savings and service charge earnings accumulated over the year were paid to the members. Women went home with huge amounts of money. In some cases, the savings women had made in one year came close to the average annual household income of people in the Upper East region. According to the latest Ghana Living Standards Survey, the regional annual household income is 616 Ghana Cedis ($194.01). Some VSLA members received 496 Cedis ($156.22) during the share-out. Collectively, the group raised an astounding 7121 Cedis ($2242.82).

Madam Comfort, chairlady of the VSLA group with a part of the group’s savings

Field worker Solomon Abeinge explains that the peer pressure in the group is crucial to the success of a VSLA group. Members do not want to show that they are unable to ‘buy a share’ (i.e. make a saving) during the meeting, because of the stigma it carries. They feel encouraged to take up new forms of business to make sure that they are able to contribute something every week. Madame Comfort, chairlady of the group, explained that “if somebody who is not more than you can do it, why can you not do it?” Another member added that she normally only sold pepper and salt, but that she often adds rice to it when she sees that she is not going to have enough to buy her share at the next VSLA meeting.

One of the members counts her money

The concept of VSLA works not just because of the additional resources it provides its members with, but also because it challenges them to go the extra mile.

In partnership with Self Help Africa, Comic Relief, Tree Aid and the Dutch Development organization SNV, Trax has established 10 VSLA groups over the past years.

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