May 12, 2023

Empowering producers in the rice and maize sectors through a financial inclusion tool: VSLAs (Village Savings and Loans Associations)

Animal Production Related

Staple Crops

Ivory Coast

In the WAEMU region, Côte d'Ivoire is the second largest producer of paddy after Mali and the third largest in the ECOWAS region after Nigeria and Mali. Maize is the fifth most important food crop in Côte d'Ivoire in terms of tonnage and, according to the FAO, will represent a national production of 1.1 million tonnes in 2020 compared to 600,000 tonnes in 2003.

Despite these important assets, these sectors are facing difficulties not only at the level of production and processing, but also at the level of development and financial inclusion of actors such as producers within the value chains.

The vast majority of producers and more generally of the Ivorian agricultural world live in rural areas, and their main activity, agriculture, faces a major difficulty which is the lack of education and financial inclusion.

Financial inclusion is identified as the means to improve agricultural productivity with an emphasis on food security, and to increase incomes and fight poverty.

Thus, in order to contribute to the financial inclusion of producers within these two value chains, 2SCALE, with the support of the different champions involved in the partnerships (Rice and Poultry), has proceeded to set up Village Savings and Credit Associations (VSLAs). This income-generating tool aims at the financial autonomy of the populations while helping the development of the Agricultural Business Clusters (ABCs) as well as their competitiveness on the food markets in order to be resilient to the effects of climate change.

Empowerment, the useful key to the producers' coffers...

The VSLAs represent a source of financing for the producers who were sometimes obliged to take loans from traders who in turn took their products at low prices. In addition, given the effects of climate change, financial institutions are increasingly reluctant to grant credit to small-scale producers because of the risk of not guaranteeing yields.

Generally composed of women, who adopt and integrate them more easily than men; the VSLA take several forms within the groups such as: tontines, contributions and others.

The main goal of these associations is to make producers autonomous through microfinance, in order to allow them to have their own source of financing.

Before the establishment of the VSLA, the producers were confronted with several types of challenges that could be grouped under two levels, namely financial difficulties due to the problems of working capital making it difficult to access inputs, raw material (paddy/maize) and labour; and financial difficulties due to the limited income impacting the family and community life of the producers (school returns, diversification of income generating activities, community solidarity, etc.) ...

Within the framework of the partnership with 2SCALE, several action plans were implemented by the field teams or Business Support Services (BSS) in order to alleviate the financial situation of the producers. Training on financial education was carried out in most of the existing ABCs, which encouraged the actors to formalise and even create new VSLAs, including 39 VSLAs within the rice partnership (6 in the Soubré ABCs, 3 in Guiglo, 5 in Katiola, 14 in Daloa and 11 in Agboville).

For example, in the Nikla's agricultural business clusters (Rice partnership), near the town of Guiglo, the training sessions carried out by the BSSs with about twenty women have had an impact on the women, who now testify to this.

Mariam Koné, president of the Sénoufo women's group of Guiglo called the "Les Etuveuses de Nikla", confided that :

when VSLA was not yet in place, our problems were generally related to the schooling of our children, how to enlarge our groups, it was difficult for us to set up a small market (a small activity) without a good business, when we talk about contributions between us, the women of the groups, it was complicated to end up without a discourse.

She also adds that :

from now on, thanks to the training we received, today we are more than 27 women within this VSLA, we meet every Sunday and proceed to contributions or tontines of 1000FCFA per member, total them up to give them to a member at the end of the meeting and repeat the same scenario every week.

Tenacity against non-compliance...

The Village Savings and Loans Associations (VSLAs) are set up by the creation of an office made up of the members of the section, a general assembly and a management committee. The board is generally composed of a president, a secretary, a treasurer and two counters.

In B.koukoguhé, a locality in the town of Daloa (Maize partnership), the VSLA were set up as part of a project to support women. In this grouping, the VSLAs are only made up of women and the number varies from 20 to 30 people. In this association, the contributions called shares vary from 500 to 1000FCFA and the maximum number of shares is 5. Here the meetings are weekly cycles and can sometimes reach 10 to 12 times a month.

Bernadette Kouamé, producer and member of this VSLA, affirms that :

the relations are very good between us, if there is a meeting where a member is absent without warning, the person is summoned to pay the double of the contribution to the next meeting... In our association, we privilege the respect, the consideration and a good collaboration in order to avoid any inconvenience .

She goes on to say :

today, if we women in this cooperative manage to get by, it is thanks to these small efforts...We keep the house as we should, we don't wait for the men to increase our goods, we do it ourselves with honour, we are also champions

Through to the motivation and the rigour of the members of the VSLA of B.koukoguhé, as well as several others within this partnership, a cooperative called TEN'D was created and includes today more than 14 VSCAs for more than 280 producers/members.

In other words, the VSLAs have made it possible to revitalise the cooperatives of both partnerships. They have also been beneficial in terms of climate change because with the money coming from the VSLA the producers of the TEN'D cooperative have been able to buy phytosanitary products (around 400.000FCFA for the deposit of phytosanitary products).

For a total of 100 hectares, each of the women in this cooperative has seen her production individually improve and double. Their basic production, which was 0.25 hectares, has now increased to 1.5 hectares. The purchase of these improved plant protection products has facilitated the adoption of new sowing techniques by the women producers, which in turn has increased their income.

Finally, the Village Savings and Loans Associations (VSLAs), tools for financial inclusion of producers, are assets in the development of populations living in rural areas. The 2SCALE programme, by facilitating the inclusion and adoption of VSLAs within the Rice and Maize partnerships, is now a key player in the promotion and empowerment of rural women. In addition, it allows organisations to be more resilient to the effects of climate change. However, the biggest concerns currently observed are the need to formalise the VSLAs and to secure the funds. To remedy this, projects to connect producers with financial institutions and training in digital tools are planned for future 2SCALE activities.

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