In Ghana, women constitute over 50 percent of the total population. They are however, marginalized in the sharing of political power, wealth, land among others.
In the Northern half of the country, the situation is a lot worse as women are unable to meet daily financial obligations due to male dominance otherwise known as patriarchy in all spheres of the society except the kitchen.
Women have therefore been completely dependent on their husbands or families for financial support to undertake any business activity.
They are unable to rely on the banks because of the high interest rates and the banks’ reluctance to give women to loans without collateral.
The narrative for some women has however begun to change as they embraced the Village Savings and Loans Associations (VSLAs) also known as Community Saving and Loans Associations (CSLAs).
These Associations are now spread in 6 out of the 11 districts in the Upper West Region engaging about 25,000 women in over one thousand groups. VSLAs have been setup to liberate women from financial dependency.
Lubabatu Alhassan is a 29 year old seamstress in the Wa Municipality. For over 3 years, she has been part of a small group of about 30 women who put their money in a pool.
She told GBC’s Mark Smith in an interview that a friend explained the concept to her and she thought it was something worth her while. “Every week, although the set amount is 10 Ghana-Cedis, any amount that you can get either 4 or 6 Ghana-Cedis you can come and put in the box [Cash Box].”
“I am enjoying this. If I need help and I explain it to them, [the group members], they will quickly give me the money. When you come for the money the interest is 10 Ghana-Cedis for 4 weeks. When you apply for a loan at the bank, they stress you out, when you are finally able to get the money, its value would have gone down or the interest rates would be too high.”
“As a woman, when you need money, it is always to do something urgent and so with the VSLA, I am able to get the money quickly, with very little interest,” she explained.
Miss. Alhassan has been able to expand her fashion business while still taking good care of the home and family because she is able to almost instantly access loans with very low interest rates.
Hanatu Abdulai is a 30 year old woman also in the Wa Municipality with another group of women committed to ensuring the success of the VSLA.
She recounts one of the many times the VSLA has advanced her money to be able to meet certain financial emergencies.
“I needed money for my brother’s school fees, although other people were there to take loans, because my case was urgent, they quickly gave me a loan to pay the fees and later repay loan with the lowest interest rate you can imagine,” she said
The two women, Lubabatu Alhassan and Hanatu Abdulai are among over 25,000 women who have benefited from the VSLA or CSLA in the Upper West Region.
The Village Savings and Loans Association started in Tumu in the Sissala East District with about 25 women in a single group in 2009.
Ten years down the line, over one thousand small groups with a minimum of 15 and maximum of 25 [30 in exceptional cases] women have been formed in 6 districts. The Wa Municipality alone accounts for over 50 percent of the groups.
The VSLAs are run by Youth Advocacy on Rights and Opportunities (YARO) with support from Plan International Ghana under the Banking on Change Project (BoC).
Every week, these women meet and put money in the Cash Box [a metal box with locks to keep money].
Although the set amount is 10 Ghana-Cedis, women are allowed to make available what they can afford. The women are eligible for loans 3 times the value of their contributions after four weeks.
They are required to pay the loans with and interest of 5 Ghana-Cedis within another 4 weeks.
On the 52nd week of collection, the women meet to pay out the money and profits accrued from the service charges on the repaid loans.
The profits are shared based on an individual’s contributions during the year.
Women are able to save as much as 2,000 Ghana-Cedis and earn profits of between 200 and 400 hundred Ghana Cedis during this period.
Ibrahim Salifu, an executive with YARO said the VSLAs which are in two phases; i.e the youth wing and the older generation section are to ‘imbibe the culture of saving into the women.” He said the impact of the associations on the lives of the women is unquantifiable.
“The groups are governed by a constitution and bye laws. They have a leadership of 5; the chairperson, the record keeper, the box keeper and 2 money counters. If they all do their work well, they groups last for years.”
“In the Wa Municipal, most of the women you see selling used clothing or trading in the markets are part of the VSLA. They take loans out of it and use it as startup capital for their business.”
Mr. Salifu is ecstatic about the impact of the associations on the women but he feels more can be done. Women who have started their businesses and want to scale now need larger sums of money with very low interest rates.
The VSLAs are unable to meet this demand because of the huge amounts of monies involved.
To this end, YARO is looking to partner other institutions to provide a revolving fund for the women who want to access higher amounts for their businesses.
Another growing concern is the theft of some of the cash boxes and the reluctance of some women to pay back loans taken.
Mr. Salifu is confident that when all one thousand groups come together to have a bigger umbrella body, they can draw a better constitution and instill discipline among the women while ensuring adequate punishment for willful loan defaulters.
VSLAs have become a part of women in the Upper West Region. They give women the ability to fulfill financial obligations on their own.
They are able to build businesses and support the home. They are indeed the conduit of financial independence for rural women in Northern Ghana.
Story by Mark Smith
