Development Aid from People to People (DAPP) - Zimbabwe
Support for VSLAs
Development Aid from People to People is a is a non-governmental organization which operates in Mashonaland Central, Mashonaland East, Mashonaland West, Manicaland, Harare and Masvingo Provinces.
DAPP Zimbabwe is part of the international Human People to People Movement. The organization works in the areas of education and training, health, water and sanitation, community development and agriculture. DAPP Zimbabwe’s funding partners are among others: USAID, DFID, EU, UNICEF, foundations, international and local organizations and business.
DAPP Saving Clubs
In 2014, DAPP started the Internal Savings and Lending Program and has so far established 197 Savings Clubs in Rushinga, Mutasa and Nyanga districts. The Savings Clubs are a self-funding micro-finance model. Basically, Savings Clubs consist of 10 to 15 members, but can also involve more members, who agree to meet once every month to save small amounts of money. Once the members have saved enough, they start lending to themselves.
Saving Clubs can be started by anyone who has a passion for it. Women develop their own constitution which guides them in how to control the money. DAPP has been working to introduce this concept to rural communities and it has been heartily welcomed by poor households, especially women. The Saving Clubs has given the women more influence on how to use family income to improve the welfare of the family.
The concept of VSLAS has been extensively acknowledged as a strength to consider in relation to attaining sustainable rural livelihoods because Africa has remained the poorest continent in the world despite being endowed with plenty of natural resources.
A Village Savings and Loan Association (VSLA) is a group of people who save together and take small loans from those savings. The activities of the group run in cycles of one year, after which the accumulated savings and the loan profits are distributed back to members. The purpose of a VSLA is to provide simple savings and loan facilities in a community that does not have easy access to formal financial services.
VSLAs have been utilized as a method of passing farming methods to each other and examining farming techniques with each other. VSLAs have furthermore assisted the rural populace in having latest farming hardware and farming methods and this has made more rural farmers to join VSLAs as they helped them to set aside a particular amount of money and then borrow with the goal of buying cutting-edge modern equipment.
VSLAs also give loans that are necessary to low wage families and furthermore give safe facilities for savings so as to empower individuals to adapt up in times of difficulties; act as intermediaries between individuals who have excess and individuals who are in shortfall and; assist individuals with a right, safe and sound method for saving.
Internal Savings and Lending (ISAL) and entrepreneurship
The Internal Savings and Lending program is aimed at assisting communities with problems of accessing capital from banks, micro finance institutions and other money lending institutions. The programme enables group members to internally save and lend where group members guarantee each other as collateral. In addition, the Internal Savings and Lending fosters a sense of community ownership as the programme enables the participants to form strong and cohesive groups.
In order to promote financial inclusion and formalization of Internal Savings and Lending Schemes (ISALS), in 2018 the Ministry of Women Affairs, Community, Small and Enterprise Development trained a total of 58 781 women in all the 10 Provinces on the transformation of ISALS groups into Savings and Credit Cooperatives (SACCOs). This culminated in the formation of 250 new SACCOs this has proved to be a life changing program to the ordinary women of Zimbabwe.
How can women entrepreneurs leverage on VSLAs to be economically empowered?
Women entrepreneurs can utilize VSLAs as platform to save and invest in income generating activities that will bring income when other sections of rural livelihoods such as agriculture are not flourishing.
Loans provided by VSLAs can be helpful in maintaining or starting a business.
Village Savings and Loans Associations (VSLAs) are thought to play a critical role in bringing financial services to rural women entrepreneurs in developing countries, where access to formal financial services is typically very limited.
VSLAs are better and more transparent ways of saving.
VLSAs have the following benefits to women:
- Improved women’s economic empowerment
- Increased household income and economic activities
- Increased household expenditure on essential social services
- Increased household access to cash assets and disposable income
- Increased access to business capital for rural micro-enterprise activities
- Improved household resilience to external shock such as food insecurity
- Rural women are now capacitated to expand, diversify and grow their businesses. They have a lot of knowledge and skills but continue to suffer from the daily manual drudgery of operating their businesses due to lack of equipment, poor infrastructure to reach sustainable markets. ISALS/VSALS help them to build collateral required to accesses large amounts of loans to procure much needed equipment.