From micro-savings to the formal economy

Completed

Microsavings and loan associations, managed by the poorest for the poorest, are an effective tool in the battle against poverty. The members pool their money collectively and can then lend each other small amounts to start or grow their own income generating activities, improving their livelihoods. The programme that CARE successfully implemented in Haiti from 2014 to March 2016 has delivered visible, replicable and sustainable results, bringing over 7,000 vulnerable people improved access to basic financial services.

Duration
2013-2017
Focus area
Women’s Social and Economic Development Access to Basic Services
country
Haiti
partner
CARE

Results achieved

The level of rural poverty is acute in Haiti: nearly 70% of rural households are regarded as chronically poor (compared with just over 20% in towns and cities), lacking access to basic goods and services. According to ONPES (Observatoire National de la Pauvreté et de l’Exclusion Sociale – the national observatory on poverty and social exclusion), rural poverty is caused by a lack of earning opportunities, isolation, low qualification and skills levels and high levels of insecurity in economic activities.

Microsavings and loan associations, managed by the poorest for the poorest, are an effective tool in the battle against poverty. The members pool their money collectively and can then lend each other small amounts to start or grow their own income generating activities, improving their livelihoods. The programme that CARE successfully implemented in Haiti from 2014 to March 2016 has delivered visible, replicable and sustainable results, bringing over 7,000 vulnerable people improved access to basic financial services:

  • 261 Village Savings and Loan Associations (VSLAs) have been created over the past two years in the communes of Gonaïves, GrosMorne and Terre Neuve. These groups are autonomous and self-managed, a key factor in their long-term success.
  • The 7,399 members of these associations - 66% of whom are women - have been trained to understand the basic concepts of lending, credit, repayment and interest, and have saved approximately €270,200. Over 4,000 of them have obtained small loans from their groups that they invested in small businesses to improve their household income. The loans were repaid regularly, with a repayment rate of 97.03%.
  • Financial links have also been facilitated and dedicated financial products created, enabling the 41 more mature VSLAs to apply for bigger loans from formal microfinance institutions that wouldn’t otherwise be accessible. The proven commitment and strong sense of ownership of VSLA members – who emphasize the importance of trust, solidarity and transparency as essential components of the group – underline the extraordinary impact of this approach.
  • Thanks to the resulting capacity development, the growth of new income-generating activities and economic empowerment, 97% of women belonging to VSLAs play now an active role in decision-making within their households and the wider community.

 

We find that the Village Savings and Loan Association intervention increases the likelihood that women run a business. Income from businesses also increases significantly

Innovation for Poverty Action, Impact Assessment of Savings Groups. Findings from three ransomized evaluations of CARE Village Savings and Loan Associations programs in Ghana, Malawi and Uganda, 2012

More about the programme

  • Saving to create a better future
    We have been invited by CARE to attend a meeting of Rosana, a Village Savings and Loan Association (VSLA) at Carrefour, south of the Haitian capital Port-au-Prince. Here's what we've witnessed.
  • Visions of resurgence
    The interactive web documentary Femmes Lumière”, directed by Cyril Le Tourneur and Vincent Bonnemazou, and produced in partnership with CARE France tell us the role micro-saving plays in the fight against poverty.