Village Savings & Loan Project Bringing Economic Empowerment to Over 2,700 Ugandan Villagers is Graded and Strengthened to Expand

The Uganda Village Savings & Loan (VSL) Evaluation Project was funded by a District 5020 Community Grant (DCG 2352) from March to June 2024. Michael Camp, the Chair of the Rotary Club of Bainbridge Island (RCBI) World Community Service committee and Grant Writer Vicki Evans facilitated the hiring of a VSL professional auditor to perform the evaluation and make recommendations for improvements.

Three years ago, RCBI, the Rotary Club of Kyoga Basin Uganda, and a Ugandan NGO named AWIGOE began training groups of 25-30 villagers in the Amolatar region to form VSL associations. Members were trained in how to save money weekly, secure it in a cash box, do record keeping, and begin making entrepreneurial loans to each other. After a year of training, each group becomes self-sufficient. They do an annual “share out” with a 20% return on savings and members can take up to three loans per year. This village banking system results in villagers boosting their revenue from micro-enterprises by two or three times.

This evaluation project entailed the professional auditor assessing 20 representative groups for how well they follow the VSL manual, run their VSL group, keep records, distribute loans, and how well the groups were trained by AWIGOE staff. The project made these findings:

  • Graded the quality of each group in terms of its formation and effectiveness of its constitution, leadership, procedures, record keeping, member loans, social/emergency fund, business/education fund, and share outs.
  • Attendance was excellent with more than 90% across the board.
  • Women made up 67% of members and leaders in the groups.
  • The survival rate after “graduation” and becoming self-sufficient is over 95%.
  • 70% of groups had Good or Excellent overall grades (80’s and 90’s).
  • 30% of groups need some form of supplemental training.

Recommendations include:

  • Retrain all Village Agents (Junior Trainers). VAs should work 4 months in the field before being certified. Refer to details of grades to see areas needed for retraining.
  • Include content on data collection and the use of the online MIS (Management Information System) used in the wider VSL community in training of VAs and Field Officers (Senior Trainers).
  • Create a uniform Passbook as the primary record of all transactions rather than the two different varieties used, which causes overwork and confusion.
  • Form executive committees to create and oversee operational best practices for the groups.
  • Establish a traditional microfinance loan fund for group members to access to obtain larger loans outside the VSL system. Provide training in this type of loan management.

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By Vicki Evans