Village Savings and Loan in a Nutshell

Forty women circle around a metal box bound by four separate padlocks. Many of them have children with them, either secured to their backs by a colorful wrap or, if the children are old enough, they play outside of the meeting place with the other children.

These women are here to invest in their village savings and loan (VSL) program. Here in Ghana, loans are not easy to obtain. Many micro financing firms have extremely high interest rates that make loans almost impossible to pay back for local farmers. Females experience an even harder time getting funding because of inequality. Their interest rates can reach up to 35 percent.

Village savings and loan programs allow community members to come together and invest in a pool of funds and borrow with very low interest rates set by the members themselves. They also have a community farm project that is funded by the group. This project helps supplement their group’s income with the profit it generates.peter_sept

Borrowing is based upon how much members contribute to the pool, and loans must be paid back in full before another can be taken out. If a member invests consistently and has a good reputation of making payments on previous loans, they qualify to take out larger sums in the future.

On Monday, the AgriCorps fellows including myself had the privilege of observing a village savings and loan meeting. The shareholders were new to the concept, but exclaimed proudly to us that the program was growing in funds and in participants. Sitting around the circle with the VSL group was a beautiful illustration of what a self-motivated organization can achieve without the help of foreign aid.


Peter Cohen is an Agricultural Communications graduate from Oklahoma State University. Before becoming an AgriCorps Fellow, Peter traveled to Costa Rica and Ethiopia to learn about international agriculture.