Across 2SCALE partnerships, promoting financial inclusion is a key priority. While access to formal financial services remains a challenge for smallholder farmers in rural areas, Village Savings and Loan Associations (VSLAs) continue to provide access to finance-especially for women living in rural areas. In Ghana, 120 groups are currently active in 102 different villages. Each of these groups has a membership of between 20-30 members, mainly women. The primary purpose of these VSLAs is to provide simple loan and savings services to underserved members of society who do not have access to formal financial services.
After a certain period of simultaneous individual savings, the accumulated funds and the loan profits are distributed back to members based on their contribution. This financial freedom is promoting the emancipation of women, as they now have a solidarity fund to promote their agribusiness ventures-ranging from production to value addition. In addition, some of the groups have supplemented this with an interest-free social fund which provides emergency quick funds for healthcare or bereavement expenses, after deliberations with the group members.
By increasing the probability of rural women in low-income areas to attain financial literacy to grow their savings, the VSLA model is fostering financial inclusion which is essential in the realization of Sustainable Development Goals (SDGs).
Providing access to input and farm support services in Kedan
Over 500 women are members of the 30 existing VSLA groups within the Kedan-2SCALE partnership. For these women, the VSLA has not only provided financial independence, it has also made them appreciate the power of saving as a group to complement their agribusiness ventures. One of the members, Ms. Karim Rukaya says that through the association, she can now hire a tractor to plough her three-acre piece of land, something that looked unachievable to her before. She says:
I farm maize, groundnut, and soybean. Through the loaning service in our VSLA, I borrowed 360 Cedis ($60) to hire a tractor to plough my land. Before, the tractor owners did not believe that a woman like me could afford their services but now, with the cash at hand, I am able to acquire these services. This has greatly improved my farming business!
Ms. Rukaya is not the only one who has benefited from the loan service. Most of the women say that they have purchased farm input using the funds from the VSLA, as well as used it to pay school fees for their children. In the future, these women say that they hope to implement a collective project that will benefit their community.
Empowering women to farm sorghum through VSLA groups in Faranaya
Within the Faranaya-2SCALE partnership, 88 VSLA groups are currently active in 52 communities, with a membership of 25-30 members per group. According to Mr. Obed Asunka, CEO of Faranaya, these VSLA groups have provided an avenue to empower female sorghum farmers as well as to advocate for more women to venture into sorghum farming. He says:
A lot of benefits come with the VSLA groups. Lack of access to formal financial services from institutions such as banks is a challenge. The VSLA comes in and fills these gaps and rural women can save small amounts each week and have an informal financial source where they can quickly acquire loans to sustain livelihoods. The women meet once every week and as Faranaya, we regularly facilitate trainings on financial literacy. In addition, through the groups, we advocate for more women to engage in sorghum farming and train them on good sorghum production practices.
