Central Africans Save Their Way to a Better Future

Mercy Corps began working with Village Savings and Loan Association (VSLA) groups in Central African Republic in 2008. Mercy Corps facilitated the formation of 30 VSLA groups, of which about 72 percent of membership was comprised of women.  During the pilot phase of the program, VSLAs saved a total of $26,863, 448 percent of the expected target.  The average saving amounted to $41.45 per person.  Drawing off this capital, 979 loans were taken out and more than 97 percent of them were repaid. All of the interest went back into the fund and was paid out to the VSLA members at the end of the cycle at an average annualized return of 32.7 percent.

Building off its initial success working with VSLAs, Mercy Corps now works with 165 groups with 3,417 members. The average savings per member is $54.74 and the average loan size is $78.76. A total of 2,487 loans were in circulation as of the end of January 2011, and approximately 90% of members have taken loans since the start of the program. Members can use the capital repeatedly and monitoring data shows that there is a 48% profit on business enterprises and 180% profit on original capital. 

Mercy Corps has developed and conducted a training module on basic business skills for VSLA members. The module, called Participatory Budgeting, enables beneficiaries to plan their business cycles, including the use of limited human resources and other assets, and leverage their loans to invest productively in their enterprises.