14 groups participate in voluntary savings + loaning activities
The individuals Kiunga supports…
are vulnerable to the extremely difficult conditions in which they live, and many struggle to provide for themselves and their families. Knowing this, Project Officer Mbae Leon has made it a top priority to help support groups establish voluntary savings and loaning (VSL) activities. This practice provides group members with access to modest capital and creates opportunities for income-generating activity.
The objective is to ensure that Kiunga beneficiaries are empowered economically and can move on with their lives without depending on any external support.
Leon introduces the concept of saving and lending, and then takes members through the steps of establishing VSL in their groups. If a group chooses to participate, each member is expected to make a weekly contribution to the group savings of KSh 20 (or about 0.19 USD). After the first month, members can borrow small loans from those funds to meet basic needs, and then pay the loan back with 10% interest as they are able.
These loans, while small, have the ability to greatly improve group members’ lives. They allow borrowers to meet immediate financial needs for everything from food and medicine to rent and essential household items. Groups that have accumulated more savings can give larger loans that allow members to conduct home farming activities or boost their small businesses.
This has been especially important as COVID-19 and its effects have had an increasingly adverse impact on project beneficiaries. In addition to the uncertainty of daily life, the pandemic has also led to an exponential increase in the cost of household items due to the value-added tax (VAT) and other taxes imposed by the government. Access to alternative sources of income has helped reduce group members’ vulnerability to these financial challenges.
In addition to helping members meet their immediate needs, the concept of VSL has encouraged a culture of saving and created cohesion among the group members. Members who have benefited from the activity share their stories during group meetings to inspire others. For instance, Agata Nthiga, of the Kagimbi group, has received three loans of KSh 1,000 (about 9 USD) each. With these loans, Agata started a successful vegetable kiosk and fast foods shop, and now has the income to sustain her entire family!
The implications of these loans are far reaching. They not only meet group members’ immediate needs, but lead the way to self-dignity, financial empowerment, and improved health, thanks to consistent access to food and medicine, and the introduction of income streams beyond manual labor.
Help introduce VSL activities to more support groups.