Rehana Ibro’s story of resilience
Rehana Ibro, a widow with six children living in chronic poverty in Ethiopia, has experienced the harshest of life’s offerings but found a way to continue and even thrive. Married happily in her mid-teens, Rehana was wid¬owed and living in destitution with three young children before she was 25 years old. Later she would marry again to an older man and have three more children. However, they would eventually divorce and, nearly 40 years old, Rehana was left with six children, almost no education, no home, and no source of income.
Despite her reservations – how could CARE help someone like her? – Rehana took a chance on a CARE VSLA. As a member of a VSLA, she participated in many capacity building exercises including income generating activity trainings, as well as a comprehensive introduction to savings and loans, entrepreneurship, marketing, and other important skill sets.
Rehana also began something she had never done before: saving money a little at a time.
It started with 40 birr a week ($1.88 USD), but her capital eventually accumulated to 540 birr ($25.35 USD) when she took a loan from her VSLA. Between this loan and her own savings, she managed to start a business buying and trading livestock. Then, trained with innovative agricultural techniques, she started to plant sorghum and other crops, finally enjoy¬ing a yield of over 1,000 kilograms.
The following years held highs and lows for Rehana. Despite being forced from her own home and facing legal challenges from her eldest son over land disputes, she diversified her income by engaging in petty trade of local produce and also started manufacturing local artisanal goods.
Throughout this difficult period, Rehana continued to value the practice of saving, and so her investments accumulated gradually.
Her hard work did not go unrewarded as this deter¬mined entrepreneur was finally able to construct a new home for herself and her family, complete with an iron corrugated roof, a genuine symbol of prosperity in her village. Rehana could not be more proud of her new life:
“CARE showed us how to win [against] poverty. Now I have got the way out from poverty and nothing will stop me from being rich.”
CARE’s work integrates efforts to mitigate the effects of climate change with work to boost resilience through VSLAs, diversifying on- and off-farm income generating activities, as in the case of Rehana. Remarried now, participation in a VSLA has not only helped to build her resilience, but also her confidence and independence:
“My husband used to earn and provide food for us and we had to listen to him. All decisions used to come from him but now I can make decisions independently. My husband listens to me now and values my opinions.”
The role of VSLAs in building resilience: 4 common findings
While there are no cookie-cutter solutions and VSLAs on their own cannot build all of the necessary capacities for household resiliency, some common findings can be highlighted:
1. The VSLA model does contribute to increased resilience of very poor households. The quality and quantity of coping mechanisms/options to anticipate, adapt to and absorb shocks were greater for VSLA members than non-VSLA members.
2. The VSLA model’s strength is its emphasis on building households’ capacity to independently manage their economic difficulties. VSLA methodology should incorporate training that builds VSLA members’ ability to do regular and frequent risk analysis at the household and VSLA level to determine earlier when they need to adjust their livelihoods activities to adapt to crises.
3. Women typically make better household financial managers, thinking longer-term and making more strategic consumption adjustment and allocation choices that consider the needs of all family members, particularly during times of shock or stress. By extension, increased women’s economic empowerment within the household will have an important impact on the overall resiliency of that household.
4. While the VSLA model is an important part of building resilience, VSLAs are more effective when designed to complement and multiply the impact of larger, more comprehensive support systems. For example, VSLAs were an important complement to the Government of Ethiopia’s Productive Safety Net Programme and Burundi’s public school system.
In this blog series we have shared lessons from POWER Africa on linking VSLAs to formal financial service providers, tailoring VSLAs to the needs of adolescent girls, and the role of VSLAs in building the resilience of members and communities. POWER Africa’s results add to the body of evidence that VSLAs are not only a driver for financial inclusion but, increasingly, also a platform that unlocks opportunities across all areas of CARE’s work from market participation and resilience – including working at the nexus of humanitarian relief and long-term development – to increasing access to education and combatting child marriage.
Hundreds of millions of women and girls worldwide stand to benefit from VSLAs. As CARE looks ahead to 2030, we have been thinking about how to scale up the reach and impact of savings groups globally. Next week, our Senior Financial Inclusion Advisor, Fiona Jarden, will introduce CARE’s new VSLA scale-up strategy, which was recently launched in Côte d’Ivoire.
About POWER Africa:
Project: POWER (Promoting Opportunities for Women's Economic Empowerment in Rural Africa)
Reach: The project increased financial inclusion for 750,000 individuals and their families (far beyond the original goal of 480,000)
Impact group: Poor, food-insecure households in rural areas, with a focus on women and adolescent girls
Where: Burundi, Côte d'Ivoire, Ethiopia and Rwanda
Duration: 2014-2018 (4 years)
Partners: Mastercard Foundation