Beneficiaries and Support
Village Savings and Loan (VSL) at Mpampha
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VSLs are self-managed groups that usually do not receive any external capital and provide people with a safe place to save their money, access small loans. The approach is characterized by a focus on savings, asset building, and the provision of credit proportionate to the needs and repayment capacities of the borrowers. Groups are low-cost, simple to manage and can be seen as a first step for people to reach a more formal and wider array of financial services and a linkage between other programs (permaculture vegetable and ceramic stoves production) with the VSL. VSL groups, train them how to run the VSL groups for sustainability, provide capacity building for the members in agribusiness management and small enterprise development, and then monitor the implementation of the program.
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JCED commenced the VSL program in Mphampha in December, 2016 and the first loans were given at the end of January, 2017. Since the start of the project, JCED has trained ten people in its VSL project. Out of the ten members, nine people started working on their business startups. Their businesses range from selling vegetables, beer brewing, barber shops, and selling fritters.
The group members at Mpampha have also been trained in agribusiness management and small enterprise development. We will continue to empower the members to produce ceramic energy saving stoves. JCED will also continue to develop their small businesses through the VSL so that they are able to generate doubled-income that will help them to sustain their families throughout the year. The purpose of integrating agribusiness and entrepreneurship is to facilitate members’ knowledge so that they realize that agriculture can be both a means of subsistence and improving their livelihoods through small businesses.
The group members at Mpampha have also been trained in agribusiness management and small enterprise development. We will continue to empower the members to produce ceramic energy saving stoves. JCED will also continue to develop their small businesses through the VSL so that they are able to generate doubled-income that will help them to sustain their families throughout the year. The purpose of integrating agribusiness and entrepreneurship is to facilitate members’ knowledge so that they realize that agriculture can be both a means of subsistence and improving their livelihoods through small businesses.
Empowerment is key to success. Members are now able to understand that the VSL cannot work in isolation and that they are the owners of the VSL group.The VSL program in Mphampha faces both challenges and opportunities. In terms of challenges, some members are very old and illiterate, at the beginning of the project, and there were resistances and some members were not open to say exactly what they are capable of doing in terms of business. Furthermore, record keeping is a challenge for all members--they were given notebooks but are not currently using them. Regarding opportunities, the members are cooperative, they all have interest in growing their businesses and most of their homes are close to the stove production site.
At the end of January, JCED transferred money amounting to K691, 000 to the group account as an advance payment for purchase of the stoves. This capital fund enabled members of the group to establish or startup their small businesses. Nine of the members already accessed the loan. The members borrowed K591, 000 out of the total amount that was transferred. A total amount of 709,000 of principal loan and interest will have to be paid back within three months and an amount of 236,000 each month.
The total amount of loan that was paid back during the first loan repayment meeting was 190,000 instead of 236,000. This was because one member did not pay according to our expectation. However, on average, each member managed to accumulate no less than K 3,000 per month through interests and savings. Ever since, the members were not able to save anything from their incomes because of poverty. During the last week of February, the group met to make their first loan repayment. There was no defaulter, and more than 28% of the loan and interests have been paid back.
Monitoring of implementation is essential and will continue until the members are seen to be self-sufficient. The main monitoring indicators are the total savings, self-sufficiency, overall performance, number of active members, growth rate, profitability and loan recovery rate.
After the first loan repayment, the following observations were made; after visiting the members after two days, it was found that all of them are continuing with their businesses except one. They have all maintained their capital and all said did not pay their loans from their capital despite that they are facing a lot of challenges. They all complained that business has been slow since last month but still they managed to raise profits to pay back the loan. Only one member did not pay back the loan according to our expectations. There is good progress in stove production by the members but are limited to produce more because of limitation of space as the stoves in the house are not drying out quickly because of the weather. In the future, JCED hopes its extend its VSL programming to to other communities in Mpherere and Kasungu.
At the end of January, JCED transferred money amounting to K691, 000 to the group account as an advance payment for purchase of the stoves. This capital fund enabled members of the group to establish or startup their small businesses. Nine of the members already accessed the loan. The members borrowed K591, 000 out of the total amount that was transferred. A total amount of 709,000 of principal loan and interest will have to be paid back within three months and an amount of 236,000 each month.
The total amount of loan that was paid back during the first loan repayment meeting was 190,000 instead of 236,000. This was because one member did not pay according to our expectation. However, on average, each member managed to accumulate no less than K 3,000 per month through interests and savings. Ever since, the members were not able to save anything from their incomes because of poverty. During the last week of February, the group met to make their first loan repayment. There was no defaulter, and more than 28% of the loan and interests have been paid back.
Monitoring of implementation is essential and will continue until the members are seen to be self-sufficient. The main monitoring indicators are the total savings, self-sufficiency, overall performance, number of active members, growth rate, profitability and loan recovery rate.
After the first loan repayment, the following observations were made; after visiting the members after two days, it was found that all of them are continuing with their businesses except one. They have all maintained their capital and all said did not pay their loans from their capital despite that they are facing a lot of challenges. They all complained that business has been slow since last month but still they managed to raise profits to pay back the loan. Only one member did not pay back the loan according to our expectations. There is good progress in stove production by the members but are limited to produce more because of limitation of space as the stoves in the house are not drying out quickly because of the weather. In the future, JCED hopes its extend its VSL programming to to other communities in Mpherere and Kasungu.