Photo courtesy of Medhanit Gebremichael, Farm Africa
The men and women of Tofik village in the Somali Region of Ethiopia have found that forming a Village Saving and Loan Association (VSLA) has brought them some unexpected benefits. It has bought them closer together and shown them a new way of supporting each other.
Mr Abdi, chairman of the VSLA, explains, “Usually in our culture, in case of emergencies, a person would borrow money from his/her neighbour and pay it back eventually. But saving in groups is a new idea. The social fund has also proved to us that ‘unity is strength’.
The Tafik savings group is supported by leading global organisation Mercy Corps, one of a coalition of organisations delivering the Market Approaches to Resilience project in Ethiopia spearheaded by Farm Africa. Part of the UK Government funded BRACED (Building Resilience and Adaptation to Climate Extremes and Disasters) programme, the project creates saving groups that provide loans to members who want to start a small-scale business or support others in times of need.
By running businesses and diversifying their incomes, the group members are reducing their vulnerability to climate shocks and ensuring they have money to fall back on if extreme weather impacts on their families’ abilities to make a living from farming.
Zahra Mohammad is one member who has taken a loan from the fund. Divorced with three children to support, Zahra used the loan to expand her teashop business. She explains how the training she received with the group opened her mind to the idea of saving for the future.
“I wouldn’t have been able to sustain my business for long if I hadn’t met this group. I did not take saving into consideration. The training I received has enabled me to think of this and about expanding my shop.”
Sara Derihe, another member of the group, talks about what it means to her, “I used to be a housewife. I had never thought of getting involved in such activities. Fortunately, I joined the group a couple of months ago and started my own small trading with the help of BRACED project. The training I received enabled me to be successful. I did not know how to earn and save money. The small business I have established makes me happy”.
Coming together as a savings group has helped women like Zahra and Sara realise that they are able to have some control over their future and that of their children, even in the face of an uncertain climate.