ChildFund Ireland, with Irish Aid funding, supports a Village Savings and Loans programme as part of our Communities Caring for Children Programme. Village Savings and Loans (VSL) is a means to help parents of children under 5 to generate income to support themselves and provide for their children. As well as delivering money for parents to pay for important early childhood development services, the scheme provides opportunities to access loans for people who could never hope to borrow money from a bank.

Take a look at our work with the VSL project in co-operation with ChildFund Mozambique. In our video on our YouTube channel you will see how a Village Savings and Loans Association (VSLA) works. Each association is a group of about 20-25 people who save together and take small loans from those savings. The activities of the VSLA run in ‘cycles’ of about one year, after which all the accumulated savings and profits are shared out amongst the members according to the amount they have saved. Members save what they can each week or month and this money is divided into two funds – a loan fund where the money is loaned to members based on an agreed criteria, and a social fund for grants for members to cope with an emergency.

A VSLA is a transparent, structured and democratic informal savings group. The VSL methodology is an accountable system that every member of the group can understand and trust.  VSLA’s have improved development prospects in marginalised communities worldwide, providing members with the means to cope with emergencies, build capital and re-create social relationships that enhance sustainability and promote genuine self-reliance.

See a Village Savings and Loans Association at work here!