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Achieving financial inclusion for rural women through savings and loans strategy

“My son was an auto-mechanic apprentice for six years because I could not afford to pay for his passing out ceremony and to buy the tools for him to set up his own shop after his first three years of learning.

“After we formed the Village Savings and Loans Association (VSLA) group, I got the opportunity to take a loan and helped him, now he is working as a master, with two apprentices which has made it easy for him to buy food for the family even though he has just started work.”

Ms Yinwuna Laamihe, a widow from Kongo, a farming community in the Nabdam District of the Upper East Region told the Ghana News Agency how the introduction of the Village Savings and Loans Associations scheme in her community by the Widows and Orphans Movement (WOM), a gender focused organisation, has empowered them financially.

“When I joined the VSLA scheme, I was able to contribute small to the group so when it was another time for my son’s colleagues to pass-out, I took a loan of GH₵1000.00 from the group and was able to buy the tools and the necessary things for the occasion,” she said.

Many women in Northern Ghana particularly widows are being left out of the national and global efforts at achieving financial inclusion for all and the Sustainable Development Goals (SDGs) by 2030.

Women in the rural communities in the Upper East Region whose main source of income is subsistence farming are not able to get much because of the poor soil and erratic rainfall.

Apart from finding it difficult to even secure land to engage in the farming activities to cater for their children, they do not have the financial muscle to expand their farms and fend for their families.

However, the trend has begun to change due to the introduction of the VSLA in some rural communities in the region by WOM which is empowering women and widows in some districts economically and providing them with financial independence.

VSLA Concept

The VSLA concept involves a group of people who collectively support a structured process for saving money and sharing of proceeds within a stipulated time agreed and lending to each other in the form of loans with an agreed interest rate.

The community-based banking system is being managed by the members based on their agreed rules and regulations and aimed to provide financial independence and alleviate them from extreme poverty.

The SDGs call on countries to take up pragmatic measures to achieve the goals, with financial inclusion being one of them, however, recent statistics has shown that, many women particularly widows are being left behind and they continue to swim in poverty.

For instance, the 2021 Population and Housing Census revealed that 87 per cent of the widowed population is female and these widows find themselves in 75 ethnic groups in Ghana that discriminate against them in one way or the other.
Most of these widows are unemployed and living in poverty.

For instance, it is estimated that there are over 61,000 widows in the Upper East Region and data from the 2018 Ghana National Household Registry shows that 75 per cent of them are either poor or extremely poor while 61 per cent of employable widows are unemployed.

The Ghana News Agency has gathered that the introduction of the savings and loans scheme in some rural areas in two districts, Bongo and Nabdam, by WOM, is empowering women and widows and helping them to live dignified lives.

Improving lives

Ms Nmaah Atanga, a widow with four children from the Vea Community in the Bongo District said she used to struggle to fend for her children because she did not have any funds to engage in any meaningful business.

She said during the farming season, she used to beg for a piece of farmland to cultivate groundnuts but sometimes after harvest she was not able to break even because she did not have enough to buy improved seeds and fertilizer to increase yield, however, since the policy, the story has changed.

She explained that apart from the scheme helping her to get support in terms of loans and other benefits as a member, she acquired knowledge on financial management which enabled her to manage the little funds she had efficiently.
“During the COVID-19 lockdown I could not afford to pay for extra classes for my four children and even feed them properly because I didn’t have the capital to start any business.

“After attending the meeting on the day of the formation of the groups I was happy not only because of the help from the group but the discussions made me to understand that even If I am suffering, I still have to be strong for the future of my children,” she said.

Ms Comfort Asabire, a basket weaver from the Bongo District noted that she was able to borrow GH₵1000.00 for medical treatment and was able to save about GH₵300.00 at the end of each cycle saving year.

“I used to spend the little money I get thinking it is small and I couldn’t save it but after the training even though I’m not educated they taught us how to write using charcoal so I used charcoal in making strokes which indicates the money I made and crossing out my expenses,”

Apart from that she said, she had started a basket weaving business which had helped her to contribute to the family’s upkeep and that had reduced the domestic conflicts that used to happen between she and her husband.

Providing financial independence

Ms Elizabeth Anafo, the Project Officer, WOM, said the VSLA approach was rolled out in partnership with Oxfam Ghana and funding support from the European Union (EU) as part of its, “ENOUGH! project.

She said the aim of the project was to empower women, girls, boys and men to take positive action in ending sexual and gender-based violence in Ghana, Liberia and Mali.”

She said conflicts often arose especially at the domestic level due to financial contribution and women and children were mostly the affected ones due to their economic vulnerabilities.

Ms Anafo said the concept had provided economic independence to more than 300 women from the two districts and most of them had been able to establish businesses which they were earning income from.

“Due to this some have been able to access credit facilities from our Swiss Hand Credit and other Credit Unions which has helped them to expand their business and empowered them to live dignified lives,” she said.

Aside that, and the intention to instill culture of saving, she noted had succeeded and the scheme is alleviating poverty and reducing rural urban migration among many women in the communities.

The Project Officer explained that most of the women in the rural communities were vulnerable especially the widows and were often subjected to various forms of abuses which needed collective efforts to be addressed.

She said apart from enforcing laws on the protection of the vulnerable particularly women and children, government and other development partners needed to focus on implementing policies and programmes that would provide economic empowerment to women.

This, she said, empowering women would not only help achieve financial inclusion but would support efforts towards transforming the economy and attain some of the SDGs.

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