This afternoon James told me he had to go to a meeting of the local VSLA, Village Savings and Loans Association. My ears pricked up? It sounded very interesting. VSLA groups are organised by a well known charity called Plan Uganda who do lots of good work to improve the lives of the poorest communities like that of Nakakabala. Each group has to have at least thirty members and it has to follow strict guideline laid down by Plan. There has to be weekly meetings where everyone is encouraged to attend. In fact if you miss a meeting and you have not informed them prior then you are fined and any fines are shared out amongst all the members at the end of the saving period.
To join you have to present a start-up share of 200,000 UGX Ugandan Shillings (£50) then after that the minimum that can be saved is 10,000 (£2). Each member of the group has an Account book and each time they deposit 2000 UGX the book is marked with a special purple stamp. The money that comes in at each meeting the money is lent out immediately to those who wish to borrow. For instance a woman may want to borrow 2000 shillings to buy some sweet bananas, she sells them for 4000 Shillings and then brings back the loan with 200 shilling interest which is lent out to someone else. If she fails to repay the loan then the interest is doubled the next week. The saving period is 8 months and the end of that time the 200,000 you initially invested makes a profit of 20,000. I’m not sure what percentage that is but I’m sure it compares favourably with the almost non-existent interest in the rich nations like the UK these days!
As I have mentioned Plan Uganda demands strict discipline at meetings and anyone not adhering to the rules is fined 200 shillings. There is a Chairman, Secretary, Treasurer, Auditor and Disciplinarian who happened to be James! If you are late you are fined 200 shillings. If you try to speak without first putting your hand up and addressing the Chairman you are fined 200 shillings. If you laugh you are fined 200 shillings. If you attend in ‘indecent dress’ you are fined.
So depending on the interest gained by the loans and the fines implemented you can double your money! Today 600,000 UGX was saved and loaned out for different projects. These VSLA circles not only provide the poorest families with the ability to improve themselves but also brings people together on a level playing field. One father saved up and bought a small solar panel for his home so now he has electric light and his children can do their homework. Simplicity at its best! I gave James some money to invest today and believe it will be paid back with interest at the end of the eight months when I can either choose to reinvest for the sake of the community or withdraw.
I had questioned the security of the money but because it is not kept anywhere as it is lent straight out there is no risk. Those who borrow the money are all local people. The accounts are kept in a metal box with three different key holes on different sides so it cannot be opened without the three members chosen by the group as ‘Key holders’. James is one of these. The books have to audited by the official Plan Uganda Auditor at the end of each 8 month savings period. There is no charge by the charity for auditing or for any setting up advice,
The circles also help to create a good community feeling where everyone is looking out for everyone else. Skills are shared, such as advice on keeping pigs, problems are discussed and worked on and any troubles within the community are discussed and steps taken to resolve them. So these village circles are far more than a savings bank!
By-the-way shortly before James was about to leave for his meeting I realised there was no one else at St James, Ruth and Grace were on their break and had gone home. At first I thought to myself that I am a big girl now and shouldn’t be afraid to be alone in a place I love and feel so at home. I asked James how long he was going to be and his reply was 30minutes. I looked at him doubtfully and knew it would be more like three hours! All my personal money is in my room as we are no where near a real bank here in Nakakabala and although I like to think the majority of people in the village are good honest citizens, you just never know. The bow and arrow is available to me during the day but the only time I ever tried archery I was a really bad shot so I know I didn’t have a chance of defending myself if there was an intruder! So I told James that I didn’t want him to go until he called someone to come and babysit me! Grace was happy to do this duty and spent most of the time asleep under the Owen Tree as it was the hottest part of the day. I was happy to have time to write to you and even have a siesta!
I’m hoping to have the photo problem sorted on Saturday. My darling hubby has been seeking advice from a computer expert, thank you Gurmit! The photos that got with each newsletter are ready and waiting so will add them ASAP.
Thanks again for reading my newsletters and thanks to those of you who tell me you are doing so and enjoying my rambles too!