LEARNING ROUTE ON GENDER AND MICROFINANCE- Uganda

Solidarity and Trust: Key elements for improve rural livelihhod


by Maria Fernanda Arraes

For the last 9 days we have travelled to different regions of Uganda, looking for new ideas and successful experiences in rural microfinance services and products that pay attention to gender differences. Now we have arrived in Iganda district in the Nile valley.

Our last field visit to this adventure journey had the objective to learn fromthe "Kugumikiraza" and "Together we stand" groups, who are using he Village Savings and Loans method to improve their liveliood. The group welcomed us with song, theater and a poem that explained in detail their experiences, starting with the visit of the first technical staff that arrived to sensitize them about this idea.

When someone coming from Kampala told the community for the first time to "put their money together in a box", the first impression of the community was of course to suspect their savings would be stolen...today they laugh when they remember this time.

Village Savings and Loan Association (VSLA) is a good practice that focuses on very poor people and supports them to manage their household cash flow. Based in a communiy, VSLA can be complemened with other services from microfinance institutions, which normally focus on provinding credit for clients who already have a business activity.

After a number of meetings and trainings, the communities form their own associations. In general these groups invovle 15-30 persons, men and women, chosen by themselves. They define their objectives, adhere to standard VSLA rules, elect their officials and design their saving system. Members put their money into a fund from which they can borrow after three cycles and pay back with 10% interest, so that the fund can grow. The regular savings contributions to the group are deposite for a whole cycle and then distribted partially or totally for the individual members, who will use these saving for their own needs. Most of the groups can function independently without support from the technical staff after 12 months.

Poor women have to create their own economic activities; they need to save money to feed their families; plan for social evens such weddings, pay schools fees and uniforms; health services, etc. It was a good lesson to see how the community changes and how well they have understood the importance of saving money.

The VSLA give them the possibility to socialize an meet regularly, to be trained, to benefit from the solidarity of the community, save mone and invest. Now they appreciate the savings, even more than the loans. In both groups that we visited in Iganga we observed that the women improved their livelihood through asset accumulation, better nutrition and improved health after having participated in this initiative.

These cases showed us that beyond economic empowerment, women also go through a process of social empowerment. They became more confident, motivated and engage. As one women said: "before joining VSLA, I would not be able to stand up in front of you and reply to your questions". The relationship with their husband changed and women started to participate and become involved in decisions at the family an community level.

The communities groups still have challenges: it is time now to think how to improve their products and how to access new markets. More than the opportunity to develop income activites, this experience represents an important cultural change, different family relationship and community dynamics.

After these moving visits, we returned back to Kampala to discuss all these cases and think how we can adapt and apply the lessons in our activities related to microfinance and rural development in our countries....See you in the next post, when i will share with you some of the lessons learned and innovative ideas !!