Moira Eknes, a program manager for CARE, arrived in Niger in 1991 to implement a tree-planting effort. But there was a problem. Since women couldn’t own land, they were much less interested in planting trees than making ends meet for their families. So they changed course, sowing seeds of financial independence instead.
 

What sprung from those early efforts were village savings groups, in which poor women became their own venture capitalists, their own bankers. The groups are called CARE Village Savings and Loan Associations (VSLA). 

During meetings, VSLA members deposit a minimum, agreed-upon amount into a lockbox, in some cases pennies a week. Some members request loans, $3 to start making and selling doughnuts, for example, and others make payments on loans they already have, with interest – typically about 10%. And since the members pay that interest to the group, it comes back to them as profit.
  

The VSLA model has been so successful that other organisations have replicated it worldwide. These simple lockboxes enable an estimated 30 million transactions a month – or 350 million per year.
  

At any given time, most of a group’s savings is in circulation as loans. Repayment rates easily approach – and in some cases reach – 100%, turning on its head the notion that poor borrowers are risky borrowers.
 

The groups equip their lockboxes with three padlocks, then assign the keys to three members. All individuals must be present in order to unlock the box. It’s one measure to protect the life-changing, life-saving contents inside and to ensure an environment of trust and accountability among the group members.
 

The lasting reward is not so much the profit members make, but the many ways in which they invest that profit to improve life for their families and communities.
 

Examples include the creation of  cereal banks to stock and store millet and maize to help their families and villages through lean times. Another is paying school costs so children can access the education that is rightfully theirs. Members can access better health care and expand their businesses to create more economic opportunity for their households and communities.

And as CARE guides VSLA groups to increasingly use mobile technology for their financial transactions, they’ll open their digital “lockbox” not with three keys, but with three passwords.
 

Find out more at https://www.care.org.au/village-savings-loans/