Can Uganda adopt the village savings and loan associations?

Jul 10, 2015

Recent media articles have urged for the use of village savings and loan associations in social services delivery.



By Laban Musinguzi Kashaija

Recent media articles have urged for the use of village savings and loan associations, (VSLAs), in social services delivery especially in the rural parts of Uganda.

These arguments have been premised on the observation that the participation by men and women in livelihood and economic empowerment initiatives like VSLAs leads to changes in the economic status of households.

In Uganda, the VSLAs model was introduced by CARE Uganda in the late 1990s in West Nile and later popularised by Plan Uganda in the districts of Luwero, Kamuli, and Tororo. Its overall aim is/was to help those at the bottom of the rung of the economic ladder to meet the basic needs of saving and credit.

In rural areas, the VSLAs have become a household name and many development partners are currently using these structures to penetrate rural communities. A few agencies such as AVSI Foundation have adopted and scaled up the VSLAs model to improve child protection in their areas of work.

I wish to add my voice to these debates. Contrary to what an average urban dweller thinks of village life, people in villages often get busier, especially during agricultural peak seasons and virtually have no time for interaction. In these communities people have become less interested in meetings convened by officials from the district and other agencies unless there is a direct benefit. It is interesting, however, that people find time and devotedly attend their weekly VSLAs meetings.

During these meetings, not only do they discuss money matters but also share updates regarding goings-on in the village, which programme is coming to the village, how to address the problems of farming, information concerning an emerging health challenge or disease outbreak among others.

Increasingly, VSLAs have become sources of social support for members. Most of the VSLA groups have also developed a social support mechanism, where people contribute to a special fund termed as “ebigwa bitalaze” (unforeseen occurrences). When a member of the VSLAs loses a loved one, ebigwa bitalaze is used to assist the individual/family. Given that majority of the members are females, they draw strength and counsel from each other to withstand family and marital challenges during the weekly meetings.

The increasing prominence of VSLAs falls within government-led initiatives to encourage communities to form groups to manage development programs such as agriculture (NAADS) and more recently electricity distribution.

However, telling people to form groups, including VSLAs might prove counter-productive fueling the creation of incentive-led groups whose aim would be to target whatever there is on offer. Yet the notion should be to tap into the existing groups that are already working without any form of external support to take up these ideas. Emphasis should, therefore, be placed on preserving what bonds people already share in these groups and ideas should be introduced in a manner that is seen to practically benefit everyone lest they will be implicitly or explicitly resisted.

Whereas it may be tempting to assume that the VSLAs can be a magic bullet for most problems in rural Uganda, a delicate balance needs to be taken before adopting VSLAs as a structure for service delivery in rural areas. Cases of VSLAs leaders who have misused their positions to leverage resources for themselves at the expense of other members have been rife.

The other challenge is cheating in groups, a behaviour that threatens social cohesion of the VSLAs and the community at large. This behaviour, endemic in most parts of Africa where programmes of this nature have been engineered externally, is termed “elite capture” in development literature.

Additionally, the dominance of women in the social groups has been associated with increasing levels of family instability within these communities as much as this has been an empowering structure for majority of the women.            

Delicate as it is, the lure to adopt VSLAs as a service delivery model is worthwhile to consider because of three main reasons.

First, rural Uganda generally remains under served. Access to health, education and other services remains a challenge in many respects.

Second, there is limited evidence of commitment to devote substantial efforts towards curbing leaks in resources intended to improve access to services in rural areas by government.

Third, and related to the second, there is too little evidence in Africa and Uganda in particular to justify belief in conventional social services provision policies and programs.

The writer is a researcher with a WOTRO funded project, Developing Sustainable Community Health Resources in Uganda (CoHeRe), based at the University of Amsterdam, The Netherlands and Makerere University, Kampala Uganda

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