Village Savings & Loans Association helps local women to set up her own business
Success Stories September 27, 2023
Jogenau Raive never made it past grade 10. Her dream of pursuing further studies ended when she dropped out. Whilst her friends continued to advance in education, Jogenau left the boarding school, got married, settled in the village and raised children. It was during this time when she realized the demand of raising children, sending them to school and the financial burden that came with it. She gradually descended into the life-style of women of rural Papua New Guinea, supporting her family through crop production and raising domestic animals. But in a place where there is lack of employment opportunities, no proper health facilities, no power, no running water, no road network and the only means of connecting to the outside world is by a light aircraft, life was difficult for her. She tried venturing into crop production and sales but options were limited.
“I saw education as a way out from this place but all this came crashing the moment I dropped out of school,” she recalled. But then, she had the opportunity to attend the Family Business Management Training (FBMT) and Financial Literacy Training (FLT) offered by CARE International in PNG, an implementing partner to USAID’s Lukautim Graun Program. Through the training, Jogenau improved her understanding of basic principles of saving, budgeting and improved skills in managing small family business. The training ignited her dream of starting a small family business. She realized she had missed many business opportunities and the training gave her the confidence to explore them.
Care International after conducting trainings on FBMT and FLT with the people of YUS in Morobe province in rural PNG, saw the need to set up Village Savings and Loans Association (VSLA) to encourage savings culture among the people.
“VSLA is a concept that stemmed out of FBMT and FLT. One of the topics in the FBMT is budgeting and savings. Also in the FLT, there is a session on budgeting and savings. When we (CARE International) delivered these topics, the participants asked where they can save their money? So this is how the idea of introducing VSLA into the community came about. It also helps them to build the savings culture because a lot of them lack knowledge on how to save. They earn money through the sale of coffee and fresh produce but there are no banking services available and VLSA is the only option,” said Ottis Osake, Senior Project Officer with Care International who was instrumental in setting up of VSLA.
Due to its remoteness, other financial institutions such as banks do not operate in YUS area. VLSA is the ideal option for the people. VSLA works in a simple way. The members of the group must be over 18 years old. The group has a constitution that governs their activities. There are five men committee who manage VSLA. They are Chairperson, Record Keeper, Box Keeper, Money Counters one and two and their operations happens in a cycle. The first cycle is always nine months. After nine months, the group will do a payout to its contributors. The second cycle and the future cycles run for 12 months and then the payment is made. During the payout, the money contributed including the profits they make through various income earning activities are shared. The contributors have taken advantage of the opportunity provided through the trainings and boosted their savings. Jogenau is among the contributors who saved substantial amount of money and expects a hefty payout. She has improved her understanding of basic principles of saving, budgeting and improved skills in managing small family business.
“I’m setting up a trade store once I get my payout,” she says.
With the help of her husband she has built a trade store in her village, awaiting her payout to purchase store goods.
“One day, I hope to expand my trade store business and be financially secured,” she says.
The person instrumental in the setting up of VSLA is happy that the concept initiated through financial support from USAID’s Lukautim Graun Program is benefiting the remote community.
“Thank you, USAID for the financial support as it helped us reach the rural communities. I’d like to say that if any development agencies want to see change in the lives of people, I’d encourage introducing VSLA in all their sites. I strongly believe that supporting the creation of VSLAs will help remote communities save and help transform their lives,” said Mr Osake.
