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Voluntary Savings and Lending Associations
A grassroots approach to microfinance

The women of one of Diender's two Voluntary Savings and Lending Associations (VSLA) gathered for their weekly meeting. Their group formed in August 2013 after four members attended an intensive three-day training in Fass Koffe at CREATE!'s Appropriate Technology Training and Demonstration Center.  

On a hot, dusty day in June 2013, 26 community members representing all six of CREATE!’s villages gathered as CREATE! introduced the VSLA. The VSLA program was introduced in response to community members’ need for a simple, yet effective, way to manage their money. VSLA is a self-managed, highly organized, and democratic money management system practiced by over seven million people worldwide.

An association is made up of 10-25 people who save together and take small loans from their savings over a one-year cycle. Members attend weekly meeting where they deposit their savings and collectively make decisions on loan disbursement. All activities are carried out in full view of the entire association, building trust and creating transparency among members.
 
“At microfinance institutions you have to pay money even to save money because you are paying for their staff. With VSLA, members are the staff, and they are paying themselves,” said Amady Kane, Community Volunteer in Fass Kane. For rural villagers who may not be able to read or write and whose needs are rarely met by for-profit financial institutions, the VSLA provides an accessible solution for even the poorest of the poor. Unlike many other microfinance initiatives, VSLA has no involvement with outside institutions. Each association’s money belongs to its members and stays within the community.
 
Since the initial training, all six communities have adopted the program forming 18 associations of 20-25 people each. A total of 396 community members in CREATE!'s partner villages are actively participating in VSLA.
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