Community savings associations in Koh Kong province yesterday became independent groups. Village Savings and Loans Associations (VSLAs) have been operating in Koh Kong since August 2012 with the support of CARE staff. Communities are now confident in their ability to continue these independently and so CARE has handed over responsibility for these to certified village agents and their communities at an event on 15 July.
VSLAs are a community savings model developed by CARE and now implemented in 69 countries with over 8 million active members. The groups bring together up to 15 people together each week to save a set amount over a period of time, usually nine months. The funds form a pool of money from which members can take out small loans at an agreed rate of interest, before the final total is eventually divided between members in proportion to how much each contributed. VSLAs have so far been very successful in Cambodia, with some groups saving as much as ten million riel (approximately USD$2,500).
The success of CARE’s VSLAs in Koh Kong was formally acknowledged at the event by the Sre Ambel Vice District Governor: “VSLAs have mobilised community participation and motivated people to save more. Using loans from within their group has reduced people’s need to access loans from external institutions... CARE’s work has truly led to a lot of changes in the welfare and economic empowerment of saving members, particularly women, and their whole family.”
There are now over 100 VSLAs in Koh Kong, with 63 groups continuing to a second savings cycle and 17 now reaching their third. As they continued these became self-managed and self-independent, requiring less support from CARE staff. 40 of the newest VSLAs were directly formed and trained by the village agents themselves and collectively they will manage a total of 93.
The handover event officially recognised the village agents as key figures taking ownership of community savings in their villages. Local authorities and community members witnessed this transfer of responsibility from CARE to the community, which also provided an opportunity to celebrate the achievements of VSLA groups so far.
Handing over this responsibility ensures that understanding of how VSLAs operate is developed within communities so that these will continue to operate long after CARE ceases to be directly involved. These community representatives will now provide the ongoing support for each group, helping to monitor the simple savings system and overseeing activities such as savings share-outs. CARE will remain available in an advisory capacity.
The event took place in Trapaing village, Sre Ambel district, Koh Kong on 15 July 2014 from 8-11.30am.
Further information about VSLAs can be found on our project information page.