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When it all falls apart: VSLAs in crisis

by on Sep 14, 2011  |  posted in Post-Disaster, Savings  |  6 Comments
In the spring of 2011, election violence consumed Ivory Coast. The village of Tchebloguhe in the north of the country was brutally attacked. The village was burned. After the armed men left, slowly the villagers returned. One woman found her house and all her possessions gone—burned to the ground. But she began digging in the charred soil, and unearthed a metal box with three locks, still intact.

It was the caisse, or cash box, of her Village Savings and Loan Association (VSLA). She was the treasurer, and before she fled, she buried the box that held the group’s savings. When the attacks came, the group was about to have their “share-out,” a meeting in which each member receives both her savings and her share of the group’s profit made on lending. The box was full of the group’s hard-earned, hard-saved money.

When the group returned, they had a quiet share-out and used their savings to help recover their losses and resume small-scale money-making activities. Immediately, they had something to help them begin to rebuild.

International Rescue Committee (IRC) works with 86 VSLAs in Ivory Coast, and of the 20 of those mostdramatically affected by the violence, the overwhelming majority had their share-outs just before or just after the attacks. Most resumed saving almost immediately.  The groups made various adjustments—reducing the minimum amount needed to save, extending the repayment terms, or  allowing a grace period for repayment—but they all continued saving and lending together.

When Mathilde Dubois, IRC’s Economic Development Coordinator in Ivory Coast, told me the story of the woman in Tchebloguhe, I was thrilled. I thought of how amazing it must have been for the group members to open that box and have something right away, something they themselves had saved and earned, to help in that black hour. It is critical for livelihoods to resume after a crisis, and these groups can be engines for recovery. What can we do to support them, I wondered, to reinforce them?

I also thought of those frantic moments in the village before the attacks came. How brave and quick-thinking this woman must have been! Without planning or discussion with her group, she found a way to protect their savings. I would have been terrified. She is truly a hero in my eyes.

When Mathilde and her team reconnected with the VSLAs, they all had stories to tell.  Some groups gave their boxes to non-native Ivoirian members, who the group felt would not be targets of violence because they fall outside of the country’s political and ethnic divides. Others gave their boxes to non-group members for safekeeping, buried their boxes, or held their share-outs in advance of possible attacks so each member could move with their own money. But all of this had to be done in the heat of the moment, and in great fear.

“We know the methodology is empowering and flexible,” Mathilde told me. “These groups trusted each other and had more social cohesion than we ever expected in this divisive and violent time. We need to work with them to develop a ‘Plan B’ in case of conflict.”

Determining this Plan B is an urgent need. In November, elections are planned for the Democratic Republic of the Congo, and there is expected to be violence. Many of the VSLAs we support in Ivory Coast are well-established, but our groups in the DRC they are just months into their first cycles. It is too early for share-out. What are the best contingency plans for them? Should they get their books in order and push up their audit process? Pause activities in anticipation of possible conflict? Set up secreted safe places for their cash boxes? In the next few weeks, we will start this conservation with our groups in the DRC: What is their Plan B?

Mathilde and her team are now working with the VSLAs in Ivory Coast and documenting how they adjusted, what they need now, and what we can learn from their experiences. We hope to see how they can be a force for recovery in their villages.

Sarah Ward and the IRC team will be attending the SEEP Annual Conference in November. There, they hope to share their thoughts and initial findings, and discuss how VSLAs can survive and thrive in unstable environments.


Hugh Allen says:
Sep 09, 2011

I was frightened to open this Sarah, but relieved when I read it and that the VSLAs had weathered the storm. I don’t think, however, that there is an easy answer. In general I have always recommended that we don’t do VSLAs when people are at each other’s throats, but somehow it always seems to happen fast and without warning. I think we could say the same about stocks of grain or livestock: there are simply no guarantees when things fall apart.

I am, however, of the opinion that as mobile ’phone technology spreads a lot of these risks will be mitigated.

But let’s not forget that what you described tells us:

1 that people valued their VSLAs and are carrying on
2 that they found ways of dealing with the crisis. VSLAs tend to create in people the ability to make decisions and act – maybe this is a stretch, but the creativity they displayed appears to reflect this


Claudine Inamahoro says:
Sep 09, 2011

Reading this reinforces my belief that VSLA provides people with ways that help to weather many storms in life. Welldone to the women in Côte d’Ivoire and good luck to all VSLA members around the world.

Sarah J Ward
Sarah J Ward says:
Sep 09, 2011

Hi Hugh! – good to read you – and thanks for your insighful comments .

I agree that mobile phone money transfer technology will help here, but so many VSLAs depend on the ability to move and handle money quickly and publicly I have not yet seem how something like MPESA in Kenya will relate directly to the VSLA structure…I am looking forward to seeing how groups adapt to this new resource. Anyone have any examples?

I think that some examples (like one I know of – a savings group in India that developed their own flood response plan for seasonal flooding) of how the groups underwent a planning process for an anticipated crisis would be most welcome – had anyone had groups who got ahead of the crisis and had contingency plans?

Jason Wolfe says:
Sep 09, 2011

great story, sarah — both encouraging and thought provoking — thanks for sharing it with us. it seems to me that household-level contingency planning is (or should be) part of most VSLA formation processes. why couldn’t broader contingency planning (in case of conflict, disaster, etc.) be a natural extension of that? but, as hugh says and you acknowledge, we do need to be careful and judicious about when and where we introduce VSLAs. it may not be so appropriate in some contexts where social capital is low or the threat of violence is so high — or maybe we need to be creative with how to adjust the model/approach to make it work better for families under such conditions. again, a lot to think about.

Sarah J Ward
Sarah J Ward says:
Sep 09, 2011

Hey Jason, good to read you. In the post just above Claudine, who I know has worked for years with VSLAs in Burundi, might have a good perspective?

Claudine – care to comment on Jason’s thoughts?

I would just say and while a lot of VSLAs have “social funds” or “contingency funds” for members to access for illness or other household emergencies – I have yet to see “emergency plans”: like where to secure the savings, what to do in the lead up to a conflict as tensions are increasing, how to minimize personal risk….

And while some say that perhaps VSLAs are not appropriate for “conflict or crisis prone contexts” I would say that we would have to eliminate a huge number of places where this poor people need these services if we go that route. Also, VSLAs are so suited to adapting the needs and realities on the ground – they may be the best approach? But not without some significant forethought?

Do we have any Disaster Risk Reduction colleagues who would chime in?

Daniela Greco says:
Oct 10, 2011

Thanks Sarah for thinking of something like this.
Here in South Kivu we are currently working with women to help them thinking of and establishing their “Plan B”. It’s not easy… Memories of violence are still so fresh that resistance and fear are strong.
Hoping that nothing too bad will happen, we will definitely keep you posted!

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