The importance of VSLA to individuals:
It enhances individual savings and promotes a culture of saving within the community.
VSLA helps members start small business ventures, such as milk and vegetable sellers, second hand clothes, charcoal, mending of shoes, tailoring, small food kiosks and local clinics. These all help to enhance their standard of living. In addition it helps to reduce the unemployment of VSLA members.
It helps members to gain skills in business development. This increases the entrepreneurial capacity of members to do business.
Income generated from the small businesses enables families to pay for school fees, meet medical bills, buy clothing, pay house rent, food bills and other daily costs. In addition, HIV/AIDS victims are able to afford anti-viral treatment. This is very important and has broken the dependency syndrome among families.
Members who are already in business can get loans from the group and improve their existing businesses. This increases the success levels.
Members learn and adopt a culture of accountability and loan tracking. This is made possible by members themselves managing their businesses and their money.
The importance of VSLA to the communities:
VSLA group members act as role models among the community.
Activities of VSLA lead to community development. This is seen where members who had a humble beginning increase their savings and begin to borrow from larger institutions like banks and then have the ability to diversify their businesses.
Vulnerable community members such as widows, divorced or separated women, school drop outs etc have an opportunity to borrow and save without collateral security. This is not possible to the vulnerable at present. VSLA is therefore important in that it helps community members by reducing the problems associated with lack of collateral.
VSLA acts as a village bank and therefore saves members from travelling long distances to access financial agencies like banks, micro finance institutions and other lending agencies.
VSLA management is simple and can easily be run or operated by semi illiterate members.
(info taken from www.vsla.net)
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