The majority of poor people who live in
rural communities have little to no access to formal banking systems,
making it difficult to save money or take out loans at fair interest rates. Through Village Savings and Loan Associations (VSLAs), groups come together both to save and create credit opportunities. Self-selected, self-managed groups work together to increase their savings and then mobilize their own money through small loans to other group members to develop small businesses, invest in their farms, provide for children’s education, pay for health care costs, or cover costs related to unexpected emergencies. The agreed-upon interest payments return to the group, rather than an outside institution, which increases each individual’s savings. Groups also receive intensive training in financial management and small-business development. Through this methodology, groups are growing their savings as well as gaining a sense of dignity and empowerment through their accomplishments.