I remember opening my first savings account. I put in – I don’t know – $30? And then sat back waiting for the fraction of a percent of interest to accrue. I wasn’t really earning that much at the lemonade stand in my front yard, or spending that much (only on my toy horse collection), so my bank book pretty much only had entries for the interest I was getting from the bank. Astounding amounts, like 17 cents at a time. I was well on my way to affording a pack of Juicy Fruit chewing gum.
I could have used some savings advice from one of Invisible Children Uganda’s (ICU) Village Savings and Loan Associations (VSLA). VSLA groups meet weekly to pool their savings, applying for small loans which they pay back with interest. At the end of a savings cycle, the members get their savings back along with the interest they have earned.
This month, in Atanga, Uganda, a group of 30 community members saved $3,874. That’s including $383 in interest – a rate of about 10%. That’s right, no decimals in that percentage.
“The group has made tremendous progress when you compare the second cycle savings with the first,” Lamecks, an IC Livelihood team member commented. In the first cycle, the group saved $1890, $209 of that being interest.
These big savers call their group ‘Rwot Omiyo’ – God gave us.
Most of them farm for subsistence, but from the group savings they have taken out loans to start up small businesses. Many of the members buy charcoal and haul it to the trading center along the main road where they can sell it for a profit. With the money they earn from these Income Generating Activities (IGAs), they are able to pay back the loan with interest, contributing to the group’s profits.
In addition to training and support for savings and IGAs, ICU has also provided Functional Adult Literacy (FAL) training to the members of Rwot Omiyo. Last June, the group graduated from the first phase of FAL.
It will be exciting to see how this group continues to aim higher, growing their savings and living up to their increasing potential with each year.