Village Savings and Loan Associations: A Practical Guide

Village Savings and Loan Associations (VSLAs) provide poor people in remote, rural areas with a safe place to store small amounts, and in doing so to build up a fund from which small, flexible loans can be taken by the members. These independent associations operate in areas that standard microfinance programs cannot reach due to high costs and have proved successful in more than 30 countries worldwide. They work without long-term technical support and injections of donor capital.

Thirty years since the start of the microfinance revolution, poor people who live in many rural areas and urban slums still find it difficult to access appropriate microfinance products, even in countries with a well-developed microfinance sector. VSLAs based in the community are complementary to MFIs tending to serve the very poor whose income is less reliable, but also offering useful services to the economically secure.

This manual offers a set of tools that will enable any organization, whether or not it has experience with microfinance, to set up and run successful VSLAs. It sets out a one-year program of VSLA formation, training and supervision, and includes guidance on approaches to impact evaluation and the use of a simple Management Information System to analyze field officers and overall program performance.