Share-out days are important events for members of CARE’s Village Savings and Loans Associations (VSLAs), and there was certainly excitement in the air when group members in Salamneang village in Koh Kong province divided up their savings of nearly nine million riel (approximately USD$2,250).
VSLAs are small community-led savings groups where members agree to save a set amount each week. Over a nine-month period the savings continue to grow before the total is divided between members in proportion to how much each contributed. Over this time, the funds also form a pool of money from which members can take out small loans at an agreed rate of interest so that the available money increases even more over time.
This particular group set their share price at 5000riel ($1.25) and members could purchase more than one share each week depending on their family situation. Each member has their own share book and these are kept locked with the cash, which is stored in one box with three separate locks. All the keys are kept by different people to the box so that the money is safe and records cannot be tampered with, leading to a high level of trust in the VSLA model. The simple record keeping also gives women confidence about keeping their money in a VLSA. “I dropped out of school at grade 4 so I am not literate,” says Man Tier, a group member in Koh Kong. “I am happy that despite this I can still keep track of my savings easily.”
Saving as a group also has its benefits. “If I save at home we will not keep the money for long,” says Suos Thoeun. “Keeping savings in a box with the group is good as it stays untouched for longer so we are able to save larger amounts.”
Thoeun spoke of how much she appreciates being able to borrow from the VLSA. Micro-finance institutions can be complex for the rural poor to access, with high interest rates and a need for collateral. “It is much easier to request a loan,” she says. “Before I was worried that if we used moneylenders they would come to our house and confiscate our assets if we didn’t pay. Money was always a source of stress.” Many VSLA members in the area have found borrowing small amounts through the group much more effective for meeting their daily needs as they strive to develop ways to improve their income. One lady spoke of buying vegetables to grow for sale at the market, another spoke of purchasing for food for raising pigs, and another used her loan for fertilizer to improve her crops.
Improving their income is not the only way women benefit from involvement with VSLAs. Each group needs committee members to help it run smoothly, offering a great opportunity for women to gain experience in leadership positions within their communities. The social element to the groups is also key to developing cohesion within communities, as well as providing an informal space for members to share their problems and find solutions.
VSLAs are also a great way to help women have a say in the family finances; the group in Salamneang village has 15 members who are all female. The one man at the share-out meeting, whose wife had just given birth to their child, was very happy about her involvement and proud to be there to represent her savings achievements. Family support was evident in the number of grandmothers and other relatives providing child-care while the women attended group the VSLA meeting.
Following nine months of building up their funds through small loans, the Salamneang group’s share price had increased to 5241 riel. As a result, everyone received close to a 5% increase in their savings, with the top share-out reaching 91,700 riel ($230). Villagers were excited to talk about their plans for their money: buying fertilizer or livestock feed; investing in farm machinery; stocking a grocery store; or paying the healthcare costs for a new baby. As they exclaimed over the money they had received, the group immediately started planning for the next round of savings.
A facilitator from CARE was helping ensure this first share-out ran smoothly but the aim is for members to manage this on their own in the future, with a village agent on hand to provide support if needed.
Developing self-managed systems means the VSLAs will be sustainable in the long run, while simplifying access to banks or loans means that villagers can access and save substantial amounts of money without having to depend on outsiders. The high level of community ownership they feel for their VSLA has helped create a vibrant, confident group of women who are keen to work together to improve their lives.