Empowering Communities: Transitioning Village Savings and Loan Associations (VSLAs) into Financial Cooperatives

These associations are typically formed by individuals within a community who pool their savings and collectively manage a fund that members can borrow from for various purposes.
VSLAs have been widely adopted in rural and underserved communities worldwide to promote financial inclusion, poverty reduction, and women’s empowerment.

By providing access to savings and credit services at the grassroots level, VSLAs help individuals and communities build assets, increase resilience to economic shocks, and improve livelihoods. Tropenbos Ghana (TBG) under the Mobilizing More for Climate (MoMo4C) program seeks to strengthen Village Savings and Loans Associations (VSLAs) and transition them into a financial cooperative. TBG through the MoMo4C and Working Landscapes (WL) program has supported the establishment of twenty-eight (28) VSLAs in the Sefwi-Wiawso Juaboso-Bia landscape.

These VSLAs have over the years grown stronger financially; recording a whooping GHc980,000.00 as share-outs in 2023 only. Against this background, Tropenbos Ghana under the MoMo4C project engaged leadership of these VSLAs, some selected Financial Institutions, the Business Advisory Centres, the Cooperative Department, and the District/Municipal Assemblies within the Sefwi-Wiawso Juaboso-Bia landscape to explore the potential of transitioning VSLAs into financial cooperatives. This will enable three or more VSLAs to put a percentage of their yearly share-outs together and invest with a banking institution.

The importance of financial cooperatives cannot be overstated. By pooling resources, sharing risks, and providing access to essential financial services, these financial cooperatives will enable these smallholders to thrive in a competitive economy.