Cooperatives play a significant role in helping last-mile community members pool resources, access peer-reviewed affordable credit to purchase agricultural inputs, and market their agricultural produce more effectively, thus improving incomes.
Cooperatives also help build social cohesion in ultra-poor communities by providing a platform for members to work together towards a common goal. This can enhance trust and cooperation within the community, leading to improved outcomes in other areas, such as health and education.
Village Savings and Loan Associations
Raising The Village currently works with partner communities to establish savings and credit-providing community groups known as Village Savings and Loan Associations (VSLAs), typically three categories per village – Joint VSLAs, Youth-led VSLAs and Women-Led VSLAs. For equity and representation, women and youth-led VSLAs are formed separately, whereas the joint VSLA also ensures equitable representation of women in the leadership structure.
These VSLAs serve as hybrid cooperatives to pool their savings and utilize them to provide low-cost loans to members as well as work jointly towards income-generating projects, market access, or community development goals. Each VSLA is registered at the sub-county and district levels and has documented by-laws. In addition, the members and democratically elected community leaders receive training and ongoing mentorship to ensure the groups successfully work towards their goals.
Access to Credit
The communities we partner with are often considered unbankable. Without assets or a credit history, getting a loan is virtually impossible. Lack of financial access and income diversity results in an acute cycle of low income and lower savings. This means that even the slightest development shock has the potential to dramatically impact a family’s life and make them unable to pay for basic needs. This also means they cannot access any investment for small businesses, assets, or agriculture to increase and diversify incomes.
Through the VSLAs established as part of our program, participating households are able to contribute a small amount monthly, with the pooled resources utilized to provide low-interest loans for investment in agriculture, small business assets, or to meet personal needs such as school fees. With the interest earned, the groups are able to further invest in income-generating activities and community-development initiatives at the group.
Community-Development and Income Generation
Based on the goals established by each group, the funds are invested in income-generating activities at the group level, such as purchasing livestock or running a small business as a group, as well as in community development initiatives such as building access roads to the market.
Collective Power and Self-Advocacy
These VSLAs, when working together at the village or cluster levels (a group of geographically adjacent villages) to form larger associations, have the potential to further improve market access and collective bargaining for last-mile communities when selling agricultural produce.
The collective power and training also allow the groups to advocate for themselves at the regional level and access government-issued grants.
Financial Literacy and Training
To ensure skill development as well as an increased willingness of community members to elect gender equitable groups, a series of financial literacy, financial inclusion, gender equality, and behavior and mindset change trainings are delivered to provide them with a better understanding regarding budgeting, time management, household income, and gender roles, alongside income diversification and investment, and promoting a savings culture. Leadership training and ongoing check-ins and support is also provided to ensure that the groups are able to achieve their goals. Click here to read more about VSLA structure, functions and impact.
Women on a mission
Situated in Mitooma district in Southwest Uganda, the Itara village community experienced multidimensional challenges. With RTV’s support, the women in the village formed a Village Savings and Loans Association (VSLA) and set out to achieve ambitious goals for their group. They take immense pride in the progress they have made so far