PCV 15 April 2010

Brief Project Description:
The project is the launching ceremony for a new village savings and loan association. In March of 2009 my work partner and I started an association with the village’s women’s group. About 10 months into the savings and loan cycle we conducted a village-wide survey interviewing women about their credit history, what they do with the credit they obtain, their ability to fulfil certain financial responsibilities within the household, their future plans and what they believe they need in order to carry out their plans.

What we saw was that credit really is an important opportunity for the women to have. Those women with a history of credit were on average better off, economically speaking, than their counterparts who had never taken a loan before. They were more likely to be able to fulfil a wider range of financial responsibilities independently. We also observed that many women would like the opportunity have larger loans for longer period of time, for example a loan of 100.000cfa for a period of one year. The goal of the newly formed association is to mobilise local resources to make these larger, longer term loans a possibility. Through our experience with the first association we know that there are the necessary funds within the village itself to meet this demand. An association of this nature will not only provide many community members with the needed funds to invest in their income generating activities but will also create a sense of independence. If the community is able to use its own resources it will not feel so dependent on external sources of aid; the people will see that they can help themselves to develop their community.

The first 2 years the association will be similar to a standard village savings and loan group wherein members will contribute weekly savings and from this fund small loans will be issued to members. The difference is that not only is it on a much wider scale, we are anticipating over 100 members, but also the interest payments made on the credit will not all be divided up amongst the members at the end of the year. The members will still earn some interest on their savings but it will only be 50% of the collected interest that will be shared out. The other 50% will be retained by the association itself. The second year this capital will be used to jump start the loan process, providing credit opportunities before the savings have had a chance to build up. By the third year the goal is for the 50% of interest retained by the association to be enough money to cover costs to pay a manager and overseeing counsel as well as issue the larger loans. This way the association will be self-sufficient and will be giving out the higher risk loans not out of members’ savings but rather from the association’s own funds. The association’s first 2 years will be monitored and evaluated by the village’s PCV and a local NGO who will not accept payment for this service.

The launching ceremony for the association is an opportunity to build confidence in the association on the part of the community members. There exists in the village divisions between ethnic groups and certain neighbourhoods. By inviting all of the influential community members we hope to bring these groups together for the common purpose of promoting economic development within the community.

Dates of Project: The launching ceremony is scheduled for May 3, 2010 but the plans is that the group will become totally self sustainable after 2 years and then continue indefinitely.
Number of People Involved: We are anticipating a minimum of 100 people involved in the association and are hoping that the majority will be women.
Budget:

Item Number Cost
Sound system rental 1 6.000 CFA
Yams 1 basin 2.000 CFA
Rice 10 kilos 5.000 CFA
Macaroni 6 bags 1.500 CFA
Goat meat 5 6.000 CFA
Condiments 3.500 CFA
Sodas 24 6.000 CFA
Dancers 1 group 3.500 CFA
Public Announcement 6 announcements 1.500 CFA
Total Cost 35.000 CFA

Amount Requested: 35.000 CFA

Comments

GAD Coordinator: I love that she is building on the VSLA model and expanding it. My only concern is that she will not be there to oversee the first year of this ambitious project – she will COS in September I imagine. Recommend funding.
GAD Finance: I know nothing of the VSLA model, but this sounds like an awesome project! Will her work partner oversee the VSLA group after she COSes? Recommend funding.

Closing Report

Brief Description of Project:
The project was the launching ceremony for a new village savings and loan association in my village. In March of 2009 my work partner and I started an association with the village’s women’s group. About 10 months into the savings and loan cycle we conducted a village-wide survey interviewing women about their credit history, what they do with the credit they obtain, their ability to fulfil certain financial responsibilities within the household, their future plans and what they believe they need in order to carry out their plans.

What we saw was that credit really is an important opportunity for the women to have. Those women with a history of credit were on average better off, economically speaking, than their counterparts who had never taken a loan before. They were more likely to be able to fulfill a wider range of financial responsibilities independently. We also observed that many women would like the opportunity to have larger loans for longer period of time, for example a loan of 100.000cfa for a period of one year. The goal of the newly formed association is to mobilize local resources to make these larger, longer term loans a possibility. Through our experience with the first association we know that there are the necessary funds within the village itself to meet this demand. An association of this nature will not only provide many community members with the needed funds to invest in their income generating activities but will also create a sense of independence. If the community is able to use its own resources it will not feel so dependent on external sources of aid; the people will see that they can help themselves to develop their community.

The first 2 years the association will be similar to a standard village savings and loan group wherein members will contribute weekly savings and from this fund small loans will be issued to members. The difference is that not only is it on a much wider scale, we are anticipating over 100 members, but also the interest payments made on the credit will not all be divided up amongst the members at the end of the year. The members will still earn some interest on their savings but it will only be 50% of the collected interest that will be shared out. The other 50% will be retained by the association itself. The second year this capital will be used to jump start the loan process, providing credit opportunities before the savings have had a chance to build up. By the third year the goal is for the 50% of interest retained by the association to be enough money to cover costs to pay a manager and overseeing counsel as well as issue the larger loans. This way the association will be self-sufficient and will be giving out the higher risk loans not out of members’ savings but rather from the association’s own funds. The association’s first 2 years will be monitored and evaluated by the village’s PCV and a local NGO who will not accept payment for this service.

The launching ceremony for the association was an opportunity to build confidence in the association on the part of the community members. There exists in the village divisions between ethnic groups and certain neighbourhoods. By inviting all of the influential community members we were able bring these groups together for the common purpose of promoting economic development within the community and thus build a greater level of trust in the association.

Number of People Involved, (including gender and age):
• 4 girls between the ages of 12 and 18
• 3 boys between the ages of 12 and 18
• 78 women between the ages of 18 and 70
• 42 men between the ages of 18 and 70

What Were the Goals/Objectives of This Project?
The general goals of the association are to provide an opportunity for rural community members to save money on a weekly basis as well as opportunities for credit. The more specific goal of this particular project is to provide larger, longer term credit. The provision of these opportunities has the additional objective of creating financial independence for the community as a whole.

Were Those Goals/Objectives Met?
The basic goals of providing savings and credit opportunities were/are being met but as according to the plan, the goal of larger longer term credit opportunities is still a couple of years away from fulfillment as is the goal of financial independence.

What Were the Strengths of This Project?
The strengths of this project are its potential for uniting divided groups within the community as well as creating a locally available source of funds. Another strength is the projects potential for creating financial independence as well as confidence in the community’s own abilities to reduce poverty.

What Were the Challenges/Weaknesses of This Project?
The weakness of the project is that due to financial restraints the project requires volunteer support for a couple of years. Technically we could probably find community members to manage the association but my community partner believes that without financial compensation the risk of corruption is too great. After a couple of years the association should be able to support the payment of a management team.

Do You Consider This Project Completed (Please Check One):
 YES X  NO

Budget:

Item Number Cost
Sound system rental 1 6.000CFA
Yams 1 basin 2.000CFA
Rice 10 kilos 5.000CFA
Macaroni 6 bags 1.500CFA
Goat meat 5 6.000CFA
Condiments 3.500CFA
Sodas 24 6.000CFA
Dancers 1 group 3.500CFA
Public Announcement 6 announcements 1.500CFA
Total 35.000
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