Starting a VSLA Group in Your Community

Village Savings and Loan Associations (VSLAs) have helped millions of Ugandans access credit and build savings. If your community doesn't have one, you can start it. Here's how.

What Is a VSLA?

A VSLA is a self-managed savings group. Members: - Save money together regularly (usually weekly) - Give loans to members from the shared pool - Earn interest on their savings - Share profits at the end of a cycle (usually 12 months)

No bank needed. No complicated paperwork. Just trust and discipline.

Before You Start

Ask yourself: - Do I know 15-25 people who would join? - Can we meet regularly (weekly works best)? - Do we have a safe place to meet? - Is there someone trustworthy to keep records?

If yes to all, you're ready.

Step 1: Find Your Founding Members

Start with people you trust: - Neighbors who are reliable - Market colleagues - Church or mosque members - Parents from your child's school

Aim for 15-25 members. Fewer than 15 makes it hard to give meaningful loans. More than 25 makes meetings too long.

Step 2: Hold Your First Meeting

At the first meeting, discuss:

The basics: - How much will each share cost? (Common: UGX 5,000-20,000 per share) - How many shares can one person buy per meeting? (Usually 1-5) - When and where will we meet?

The rules: - What happens if someone misses a meeting? - What's the fine for being late? - How will we give loans? - What interest rate will we charge?

Write everything down. Everyone should agree.

Step 3: Choose Your Leaders

You need: - Chairperson: Leads meetings, keeps order - Secretary: Takes notes, keeps records - Treasurer: Counts money, manages the box - Key holders: 3 people who each hold one key to the cash box

Important: The person who counts money should NOT hold a key. This prevents theft.

Step 4: Get Your Equipment

Basic needs: - A lockable cash box with 3 padlocks (3 different key holders) - A record book - A calculator - Member passbooks (optional but helpful)

Some groups now use apps like Save Circle instead of paper records. Digital records are harder to lose and easier to share.

Step 5: Start Saving

At each meeting: 1. Open the box (all 3 key holders must be present) 2. Count the money from last time 3. Each member buys shares 4. Record everything 5. Handle loan requests 6. Lock the box

Setting Fair Loan Terms

Common practices: - Loan limit: 3x your total savings - Interest: 5-10% per month - Repayment: 4-12 weeks - Guarantor: Required for larger loans

Be strict about repayment. One person not paying hurts everyone.

Handling Problems

Someone wants to leave: Return their savings at the end of the cycle, minus any outstanding loans.

Someone isn't paying their loan: The guarantor becomes responsible. Involve community leaders if needed.

Someone is stealing: This is why you have 3 key holders. If theft happens, involve local authorities.

The Share-Out

At the end of your cycle (usually 12 months): 1. Collect all outstanding loans 2. Count total money in the box 3. Divide by total shares purchased 4. Each member receives: (their shares) x (value per share)

Most members earn 20-40% on their savings through interest income.

Growing Your Group

After one successful cycle: - Some members may want to save more - New people may want to join - Consider using software to manage records

Save Circle helps VSLA groups track savings, loans, and share-outs digitally. It's especially useful for groups larger than 20 members or those with multiple meeting locations.