Voluntary Lending and Saving Groups (VSLGs)

The methodology has been developed over the past 12years or more of experience from CARE, OXFAM, CRS, PRIDE and other microfinance models practised in Africa. These models have been developed over time and the model trained by Kilimo Markets represents one which increases farmer empowerment, simple, auditable, transparent, and reduces dependence on outside capital and enhances self-managed and successful growth. This model of informal savings and lending is extremely popular in rural villages and is in great demand by rural households and appeals to women more than men (women are usually 60% + of membership). The farmers don‟t borrow any capital from outside the group but is savings-led.

This reduces the dependency on the money lender who lends them money in exchange for their field crop at unfair rates of exchange. Typically, the investment fund of these groups grows by >50% per year and investments into small businesses with these group loans grow at least 50% over the three months period of the loans. At least 90% of the investment funds of groups are actively invested in small businesses at any one time, which allows for very successful rates of return to investors, who are the rural household members. These groups are highly replicable and sustainable with groups self-replicating and growing in numbers and members in rural villages, where formal micro-finance projects are challenged to be successful and self-sustaining.

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