Village Savings Offer Women’s Businesses Lifeline in Lamu

By Raphael Randu

Email, thecoastnewspaper@gmail.com

Women groups are reaping big from forming Village Savings and Loans Associations (VSLAs) aimed at enabling them to access credit to grow their businesses in Lamu County.

The VSLAs are self-managed groups that meet to save money so as to given out as small loans apart from offering financial literacy training to manage the funds through the table banking model.

This model is based on the table banking system in which members save and loan out to fellow members at a minimal interest rate that is then shared out at the end of each saving and loaning cycle as dividends.

Speaking to the media during a tour of the seven groups that had been established in Lamu Island in 2018, the Kandahar Village Savings Association chairperson Hawa Mohammed said how the VSLAs had enabled members to establish not only businesses, but also build their homes from the scratch.

“Some of our members are single mothers who have had very little help of accessing loans from mainstream banks,” she added.

Since the establishment of the VSLA in the villages members have been able to grow their financial revenue streams by way of starting small grocery businesses, MPesa shops and _henna_ saloons.

According to Ms Mohamed the starting of VSLA groups in 2018 the 13 members have benefited from getting loans apart from dealing with emergency cases such as school fees or medical bills.

She explained that the VSLA groups have bought a 50 by 100 metres plot that they intend to grow vegetables like mchicha, spinach, kales, onions and tomatoes for sales through their group grocery.

“The monies we get from such sales are used to take care of our members who have either family or individual medical emergencies or school fees problems.”

Most of the women that have joined Kandahar VSLA come together because they cannot access loans in banks since they are not formally employed with payslips.

Ms Mohamed, a mother of two, said through VSLA she has been able to put up two storey home for over four years.

Agnes Ndungu, also known as Amina and a Kandahar member of the Kandahar VSLA group, explained how the VSLA had aided her in growing two businesses and putting her two boys in school.

“I have been able to grow my grocery and juice businesses, primarily on the back on the loans that I get from the group.”

According to her the group has also brought a sense of camaraderie among members who assist each other in times of distress like medical issues.

Barke Ali, another Kandahar member, said that the VSLA had enabled her save funds that she used to buy a piece of land where she plans to build a home.

“The VSLA came just in time during the downturn of the fishing industry that was affected in 2016 with the commencement of the Lamu Port Project which compromised the rich fishing grounds in Kililana.”

In her views, things got out of hand within her family when the Lamu Port project interfered with her husband’s daily fish catch diminished leading to hardships of fending themselves.

However, from 2018 her life took a drastic change for the better when she joined VSLA where she started accessing loans that enabled her to start a fish selling business after being trained in financial management.

Another VSLA group, Kashmir, has members who have started a local CBO as well as an MPesa agent shop to manage their collected savings.

“So far we’ve been able to run the group through five cycles which has seen us progress upto the point where we have progressively shared out our savings and interest at the end of every year,” said Tima Bakari, the group’s Matron.

According to her the 13 member group has shared out Sh1.2 million among all the members recently.

A member, Mohammed Abdalla, explained how since joining the group he had been able to acquire better fishing gear and start up a fish processing business in Lamu Island.

“We urge the World Wildlife Fund (WWF) to increase their financial literacy trainings and issuance of grants that will enable the VSLA model grow to other parts of Lamu besides Lamu Island,” said Feisal Ali Aboudi, a building contractor who joined the Kashmir.

This is after seeing how the group had initially benefited its members through savings and loans.

“The VSLA model is built on trust and the closeness that the members have with one another and thus the issuance of loans and the success of each saving and loaning cycle is based off of the groups interdepence,” said Sofia Kabibi, a WWF project officer adding that her organization realized the table banking potential has especially within the informal sector.

She added that WWF’s role has so far provided training as well as monitoring the groups to excel and counsel its members to acquire land and businesses that they can get diverse income streams.

“There is a need to increase revenue streams in homes within Lamu homes since most are either dependent on fishing or mangrove harvesting which can lead to overfishing and sometimes degradation of the environment with some parts of the Lamu mangrove forest being heavily cut down due to demand for mangrove poles,” she said.

Echoing the same sentiments, the WWF communications officer Nzani Kassim said that the VSLA initiative has room to grow especially for young families to acquire financial assistance that could help them to thrive in life.

“Most of the households in Lamu, are solely dependent on one breadwinner, which is increasingly becoming difficult and thus the need for women especially to get involved in providing for their families through small businesses, as has been the case for many VSLA members who started their own businesses.”

Lamu West subcounty social development officer Hassan Mwashimba acknowledged that the VSLAs have given a boost to small businesses in the county although the groups still faced challenges of timely repayment of loans.

“Most VSLA members are not employed and a good number do not own sustainable businesses thus you find that repayment of loans hinges on when the breadwinner gets money that is then given to repay the loan,” he said.

However, he added that the national government was keen to support such groups when grants’ increments apart from being available for advising these groups on proper application of funds to fit groups’ objectives.