VSLAs, an opportunity to eradicate poverty

France Namulondo, a member of Tugezeko Women’s group in Nawampiti village displays a VSLA pass book in which saving and loan transactions are recorded. Its mandatory for every VSLA member to own a pass book.


Eradicating poverty is a prime priority for the 2063 African Union’s Agenda and the 2030 Agenda for the Sustainable Development Goals. Women in Luuka district, Uganda have joined the global fight against poverty by doing the best with the little resources at their disposal.

With a cash grant and assorted seeds from the Lutheran World Federation (LWF), Tugezeko Women's Business group ventured in commercial farming in March 2017. They aimed at producing enough for their household food, an income for their financial demands and some to establish a Village Savings and Loan Association (VSLA).

In a period of 4 months, the group harvested and sold 2,291 kilograms of maize from which they fetched UGX 2,291,000. 

Members of Tugezeko Women’s Group during a savings session in Nawampiti village. The group saves between 60,000 and 300,000 per week. Each member has access to quick loans for business among other financial demands.


“We longed to establish a VSLA from which all members would have the opportunity to acquire loans for business and to meet emergency financial demands at the least cost,” said Serbia Naigaga, the group’s Chairperson. “We didn’t think twice on investing our profit in a VSLA because it would also enable us grow our capital with profits from loan interests.”

Like they desired, members acquired loans from the VSLA and established individual businesses from which they earn a daily/weekly income to meet their financial needs and to save in the VSLA. They also continue to engage in commercial farming.

Currently, the group of 30 women meets every Saturday in Nawampiti village and contributes money. They collect between UGX 60,000 and 300,000 per meeting as each member contributes between UGX 2,000 and 10,000 depending on how much they have earned a week and are willing to save.  

A beaming Shamillah Naigaga in her retail shop in Nawampiti village. She established it with a loan from Tugezeko Women’s Group VSLA. Naigaga earns a daily of atleast UGX 10,000 which she uses to meet her financial and saving demands.


Individual businesses from the VSLA

39-year-old Shamillah Naigaga established a side garden measuring up to an acre with a UGX 6,8000 loan she acquired from the VSLA. “I realised how lucrative farming is, I wanted to earn more from the business and provide my household with unlimited food.”

In four months, Shamillah started enjoying fruits of her garden, she paid the loan with an interest of UGX 15,000 and was left with UGX 300,000 in profit. Sylivia Nabirye who yearned to own a retail shop and bag a daily income got it. She established a retail shop with UGX 500,000 and currently earns at least UGX 10,000 in daily profit.

Naigaga and Wabibye Tapenensi established poultry farms from which they get meat for food and money from egg and chicken sales, while 50-year-old Monica Nakaboye established and earns a minimum of UGX 400,000 every month from her alcohol brewing business.   

“All Tugezeko group members have acquired loans, established sustainable businesses, earn more income and can meet their household needs.” Said a beaming Naigaga.  

Members of Tugezeko Women’s Group during a savings session in Nawampiti village. The group saves between 60,000 and 300,000 per week. Each member has access to quick loans for business and sustainable development.


How the VSLA and individual businesses are changing lives

Group members can acquire quick loans and with minimal interests. “I acquired a UGX 300,000 loan in less than an hour when my child got a medical emergency and I paid back the money after a month with only a 2% interest.” Naigaga who explained that with the VSLA in place, she worries not about emergency household, medical and school requirements.   

The VSLA has empowered women to establish personal businesses as the self-managed association focusses on business and asset building. “Savings associations are powerful, empower participants, mobilize community resources and enable low-income people to plan and manage their finances.” Elias Ndyabahika LWF’s Livelihoods Officer in Luuka.

With financial independence among women, homes have become more peaceful as gender based violence which is partly a result of poverty has decreased. Nabirye explains that since she can afford her and her children’s basics, she’s hardly insulted by her husband unlike before when he used to insult her whenever she requested him to provide.

Now that she has a stable income, Nakaboye a mother of 4 says she can plan for her family’s future. “I am going to expand my business, buy land, build my children a house and secure a brighter future for them by taking them to good schools.”

VSLAs are a single indicator of Ugandans’ efforts to eradicate poverty: The 2016 Uganda Poverty Assessment Fact Sheet indicates that “The proportion of the Ugandan population living below the national poverty line declined from 31.1% in 2006 to 19.7% in 2013.”

Tugezeko Women’s Business Group is one of the 90 groups in Luuka district that have been supported by LWF with funds from Bread for the World with basic training in VSLA management.