How VSLAs help ensure that financial inclusion is gender transformative

by 26th Sep 2018
Members of a CARE-supported VSLA group in Kagadama village in Niger Members of a CARE-supported VSLA group in Kagadama village in Niger

Village Savings and Loan Associations (VSLAs) have been a cornerstone of CARE International’s programmes for over 25 years, and we have plenty of evidence of their ability to impact women’s lives positively. However, we have also learned that gender norms and power dynamics can reduce the impact on women unless we tackle them directly.

Therefore, in my final blog on Insights as a CARE employee (more on this below), I am delighted to highlight a chapter I contributed on how VSLAs tackle gender issues to a new book on financial inclusion: Financial inclusion for poverty alleviation: Issues and case studies for sustainable development, edited by EY Mohammed and ZB Uraguchi and published by Routledge. The publisher’s blurb says:

“Overall, the book provides a rich source of examples of how building inclusive financial systems can empower the world’s poor – by increasing income and employment opportunities, securing livelihoods and reducing poverty.”

The book contains many interesting topics around financial inclusion, but it is not my intention to provide a book review here, but rather to highlight the themes in the chapter I contributed.

The chapter is called: ‘Towards a gender transformative approach to financial inclusion: Lessons from CARE’s Village Savings and Loan Associations in sub-Saharan Africa’ (as snappy a title for the chapter as for the book…). It reviews evidence from within and outside CARE on the impact of VSLAs on women’s lives. In summary:

  • VSLAs provide millions of women, who otherwise have no access to financial services, with access to savings.
  • This ability to save helps women to deal with crises and supports the development of income-generating activities.
  • This change in the role of women raises gender issues with partners, family and community.
  • Explicitly recognising these gender issues and designing VSLA training approaches to address them helps improve women’s voice and influence.

The chapter tackles the issue of the development impact of savings groups, distinguishing a savings-led approach to microfinance from the Muhammed Yunus-style micro-lending approaches, which have been shown to have relatively limited economic or social impact (see, for instance, David Roodman’s 2011 report, Due diligence: An impertinent inquiry into microfinance). It then goes further to highlight CARE’s experience that, although groups are generally composed of 75% women, men often exert considerable influence on the groups via control of their wife/partner/daughter’s participation.

CARE has therefore developed a VSLA approach that recognises this issue, and works with all members of the community, male and female, to shift attitudes and chip away at prohibitive gender norms. In some instances that is reflected in women’s growing access to formal financial services and the ability to increase the security of, and their own control over, the resources they mobilise. In other cases it has meant engaging men at community and national level, for instance in Rwanda, Burundi, and DRC.

The chapter then explains that, as well as the normal positive effects of VSLAs on family income, there have been significant increases in:

  • women’s role, voice and influence in family decision-making;
  • women’s confidence to speak out in public; and
  • women’s confidence to take on formal positions in local governance.

Further effects include a reduction in domestic violence and an increase in children going to school.

For more detail I am afraid that you will have to get hold of the book and read the chapter!

As I mentioned above, this is my last blog as a CARE employee as I am retiring from CARE on 28 September. I hope, however, that I will find myself occasionally sufficiently delighted or annoyed at something in the world of international development that I will take to the keyboard again and CARE Insights will indulge me by publishing a guest blog.

Gerry Boyle

Gerry led CARE International UK’s policy analysis and advocacy around value chains and dignified work. He originally joined CARE as the Senior Policy Adviser on Private Sector Engagement. With the advent of our new Global Programme Strategy which put a particular emphasis on women’s economic empowerment, his focus changed a little.

Gerry co-chaired the Bond Private Sector Working Group. Immediately before he joined CARE he worked for Oxfam as Head of Business Relations for about three years, but the vast majority of his career was spent as a management consultant including being a consulting Partner at Deloitte, where for a time he led Deloitte UK’s Consumer Business consulting practice, serving many major multinationals. Gerry's original degree was in Law from Oxford University, and in 2008 when he left Deloitte he did an MSc in Philosophy and Public Policy at LSE.

One good thing I've read

Amartya Sen’s Development as Freedom. It provides a framework for many people’s modern understanding of what is development, based on a profoundly human-centred approach rather than anything instrumental. And to check whether one personally is doing enough to fight poverty, I recommend Peter Singer’s The life you can save: Acting now to end world poverty – it’s very clear and easy to read but very challenging! Finally, Ha-Joon Chang’s Bad Samaritans: Rich nations, poor policies, and the threat to the developing world is a very readable guide to economic development which argues strongly against many of the prevailing orthodoxies.

Twitter: @gerryboyle10