Building Wealth with Community Resources
The Village Savings and Loan club has inspired each of it's members
to start businesses, and given them hope for the future
Namibia is in an economic slump akin to the Great Depression of the 1930”s, which paralyzed Nations around the world. Unemployment is one in three, and youth unemployment is one in two. This economic decline has been exacerbated by the high cost of interventions in the HIV epidemic, and the recent drought that has decimated the fields and cattle of it's rural population.
The government has made investments in the economy and job training for its people, but these prudent interventions have not yet born fruit. However, Okapya CAG, with excellent training received from Project Hope, one of our implementing partners on the CAG project, is not waiting for the recession to end, but instead they have been empowered to take their financial future into their own hands through the Village Savings and Loan program.
At the latest meeting to close out the most recent cycle of the groups VSL, Junius of Project Hope, who has been the group's VSL trainer, recalled how when he first discussed the concept of a VSL with them, they doubted that the program could ever work for them. ‘We are unemployed, we have nothing, where will we find money to save, let alone to invest’ they said. Now, at the close of this latest round, each group member received between 600 and 5000 dollars, according to how much they invested in the fund and the groups various projects.
The Constitution of the Okapya VSL requires that each member either continually invest in the fund over the nine month cycle, or borrow from the fund to invest in their own businesses or income generating projects. Those that borrow repay the loan with interest, which is how the fund grows and members receive dividends on their investments. Each cycle is only nine months, which encourages members to be active with the funds, rather than sit quietly with what money they have.
At each meeting before conducting business, the money in the VSL cash box
is publicly counted in front of the group and verified by 3 members.
In this latest cycle, because of the energetic efforts of group members taking loans to upgrade their business and undertake new venture, the initial investment of the fund grew by an unbelievable 30%! One member was so astonished at what her investment produced for her, she trembled with disbelief and excitement when the group read her payout amount. She asked to have a friend receive it for her to confirm it was true, and was overjoyed when the money was placed in her hand. “Before the VSL, many of us were unemployed and depressed, we didn't think we could have our own business. Now most of us have our own businesses or income generating projects”.
Many of the group members started small, for example selling fat cakes at their local schools to earn a small profit, and then investing in the fund and various projects to put that small profit to work. One group member recounted how in the first round of the VSL, she began her salon, at her home. With that success, during the next round she was able to secure a storefront in town in order to expand her business. This round, she is upgrading old told and buying new equipment, and her smile as she tells her story is a mile long. Another member recalled how before the VSL began, she often didn't even have enough to provide bread for her children, instead having to rely on the school feeding program to nourish her kids. Now, she is able to send them with a full lunch box of food to school every day, and is able to afford small luxuries for herself.
When asked if the success of their VSL was due in large part to their relative proximity to a nearby town, they vigorously denied it. Many of their members’ projects operate exclusively in the surrounding villages, but they're not letting potential opportunities pass them by. They plan to collectively rent a booth at the town's upcoming trade fair, typically a lucrative event for vendors. VSL members will invest in the project, a few candidates will be selected to work the catering booth for a fair price, and all profits will be returned to the members proportional to their investment.
Okapya Members are proud to show off their feast after closing out their latest
Village Savings and Loan Cycle
At the meeting there is an energy and magnetism in the air. The group of thirty members, mostly women, sit down to the feast they have prepared to celebrate their accomplishments, and the meal is full of laughter and joy. It is clear that this group has been changed by this project. They began doubting that they could ever save what little money came into their hands, let alone increase the standard of living for themselves and their children. Now, they are dreaming big about projects they can accomplish, both individually and together.
In a country that has been plagued with unemployment and uncertainty for the last several years, the Okapya group has shown that it is possible for a community to thrive, working together to grow what little resources they have into something profound.