Tanzanian Farmers Save $32,000 In Nine Months Through Village Savings And Loan Associations

Nuriati Jumanne Mpinda doesn’t have access to a bank or traditional financial support services.  

“I didn’t have that capacity to save money,” Nuriati says. “All the money I got was  immediately used to buy basic needs.” 

Nuriati is responsible for a seven-person household. Rural farmers like her don’t often have access to financial services which makes it hard to break the cycle of poverty.

Limited Access to Financial Services Perpetuates Poverty 

For farmers like Nuriati, limited or nonexistent access to financial services and  support creates a significant barrier to poverty alleviation and long-term success.  Many of the farming families in her small village in rural Tanzania are living in  poverty.  

“Few smallholder farmers where Trees for the Future works have bank accounts  where they can save their money. Additionally, it can be difficult for rural farmers  living in poverty to access credit from formal financial institutions,” explains TREES  Director of Training Gabe Buttram. “When in need it is more common for them to  get a loan from informal lenders in their communities, but these often have high  interest rates that can be extremely difficult to pay back.”  

Improving Income through the Forest Garden Approach 

Buttram and his teammates at Trees for the Future (TREES) work closely with tens of  thousands of farmers living in poverty across sub-Saharan Africa. TREES’ local staff  train farmers in a regenerative agroforestry technique called the Forest Garden  Approach. Farmers enroll in the four-year program to receive training, seeds, and  resources. Over the course of the program, they plant thousands of trees on their  property and dozens of food and resource crops. Farmers are able transform their  land, improve their health, and increase their income through their Forest Gardens. 

Nuriati joined TREES’ Forest Garden Training Program in Singida, Tanzania in 2020. She has planted  thousands of trees and now has dozens of food and resource crops growing on her land to provide food  and income for her family. 

Village Savings and Loan Association Training 

In 2020, TREES introduced an additional training element to the training program to  ensure farmers are able to grow their wealth and invest in their own success: Village  Savings and Loan Association (VSLA) training.  

VSLAs have a proven track record of breaking the cycle of extreme poverty and  reinforcing a culture of saving and investment in the community. VSLAs are generally  made up of 15-30 people. They work together to save money, lend each other their  savings at low interest rates, and share the profits. VSLAs are designed to be simple  to manage, fully transparent, secure, and independently led by the groups  themselves.  

“Various NGOs have had a lot of success introducing VSLAs in rural communities.  These groups have helped families build savings that they can use to invest in their  livelihoods or as a safety net in times of need. It helps families to manage their cash-flow and build capital, and through the group nature of the associations, they build  trust and solidarity within their communities,” Buttram says.  

2,100 Tanzanian Farmers Are Learning to Save for the Future 

Nuriati is one of more than 2,100 Tanzanian farmers currently enrolled in the VSLA  training program.  

“The VSLA training has opened my eyes,” she says. “I was not aware that you can  save all this money.”

Local staff teach participants to establish, govern, and manage their own VSLAs. The  VSLAs are built on group ownership, transparency, good governance, inclusivity, and  a time-bound saving and lending cycle. Each group learns to manage their VSLA autonomously throughout the training program so that they are prepared to operate  fully independently by the end of the project.  

The groups meet regularly, typically weekly. Savings are collected, counted, and  recorded in the presence of all members at each meeting, then stored in a secure savings box. As the savings grow, the group is able to grant loans to individual  farmers within the group if they choose. When granted, the borrower has a fixed  amount of time to repay the loan. When the loan is paid back with interest, the  group’s savings grow. At the end of a savings cycle, everyone gets their money back  according to what they saved, along with their share of interest gained on lending  their money to group members. 

$32,000 Saved in Less than a Year 

In this last savings round, 112 VSLA groups saved a combined 80 million Tanzanian  Shillings ($32,000 USD) in nine months!  

Group members are using their increased savings to invest in themselves. They build  businesses, make home repairs, cover medical expenses, and pay school fees.  

“VSLA training has improved my record keeping skills, I can now save, plan, and  budget my money,” says participant Rukia Mwanja. “I have used my savings to increase my livestock, I was also able to pay my children’s school fees and I managed  to start a tailoring business.”  

“I used my savings to send my wife to the hospital, she was seriously sick,” says Lucas  John.  

Lucas John benefited from a loan his group granted him. He borrowed 150,000  Tanzanian shillings ($60 USD) to get his grocery and fish business up and running.  

“Saving and borrowing is something that makes me more financially resilient. I can  solve some of my family problems more easily than before,” he says. 

Growing Wealth and Opportunity Long Term 

Equipped with a better understanding of savings and with access to a secure, reliable  lending mechanism, VSLA participants are looking to the future with optimism and  confidence in themselves. 

An all-women Forest Garden group participates in a TREES pilot VSLA training in Senegal in 2020.

“My future plan is to increase my savings so that I can buy more land, buy more  livestock, and build a nice house,” says Shabani Ramadhani Mghuna.  

“VSLA Trainings helped us to put more value on money. Before I use my money, I  have to think about saving first,” Nuriati says. “My plan is to become a successful  entrepreneur.” 

TREES first piloted its VSLA training program in Senegal in 2020 and Tanzania in 2021.  Today, all TREES project participants in Tanzania have the option to enroll in the  training. The TREES team is currently rolling out VSLAs to all projects in Senegal as  well as in Uganda.  

Help the TREES team reach more farmers with land and life-changing training.  Donate today. 

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