Economic Empowerment of Women
VSLA concept transforming Kakuma, Turkana West Sub County
The Turkana people are traditionally pastoralist and keep huge herds of cattle, camels, donkeys, goats and sheep but most of their territory is extremely dry and not suitable for large-scale crop farming. This has forced the ordinary Turkana family to adopt a nomadic lifestyle – often moving from one area to another, sometimes crossing international borders with Uganda, South Sudan and Ethiopia in pursuit of water and pasture for their precious animals. With the recent discovery of large deposits of oil and Kenya’s new devolved system of government Turkana County is poised to undergo massive transformation never seen before.
Meanwhile, the people of Letea Town a small hot and dusty rural trading centre in Letea Division of Turkana West Sub County, about 26 kilometers from Kakuma town are already celebrating, though for a different reason. In mid 2009, a group of business-oriented women in Letea sat down and reasoned that they would only survive the hardships of life by uniting to form a group which would attract funding from well-wishers including the government’s Women Empowerment Fund. Loritit Women’s Development Group was thus born.
A few months later, LWF Kakuma Sub Program learnt of the group’s existence and visited the group members to understand the group even better. After a series of meetings and training the group members on Income Generating Activities (IGAs) and entrepreneurship skills, LWF supported the group with KES. 80,000 (currently equivalent to US$ 800) for IGA loans that group members could borrow to boost their businesses and pay back with an interest. Later in 2013 the group was supported with a matching grant of KES 150,000 (US$ 1,500) to boost their scheme. An evaluation of the program revealed that IGA loans were very unsustainable and did not eliminate the dependency syndrome. Meanwhile, across the border in South Sudan, LWF and Dan Church Aid (DCA) were working together to implement a new livelihoods support concept known as the Village Savings and Loan Associations (VSLA) or Table-Banking concept which was a more sustainable, empowering and dignified approach to livelihoods support. The VSLA had already been tried by other humanitarian agencies across the world, including parts of Africa and had registered impressive results by transforming ordinary people’s lives for the better.
LWF Kakuma immediately got interested in VSLA and the relevant staff in the livelihoods unit underwent an intensive training to fully understand and implement the concept. In the year 2010, 15 existing IGA groups from the host community were then identified for intensive training that was attended by about 30 group leaders who then proceeded to create awareness to all other group members and the community in general. Among the IGA group leaders who attended the training was Elizabeth Lokuau, the current chairperson of Loritit Women’s Development Group in Letea. After the training, Elizabeth went back and shared what she had learnt with her group members. “The group members were very excited about the idea and we started off almost immediately” recalls Elizabeth.
For VSLA to be successful, groups are constituted by people who know and trust each other and the first step was to allow for formation of groups of about 20 members each. “This is for effective management” says Ms. Helen Lipo, Livelihoods Officer who has been involved with VSLA groups since LWF Kakuma embraced the concept. Once a group is formed, members draw their own constitution under guidance, based on a standard template available at LWF offices. Elections are then held to identify group officials who must include the Chairperson, Secretary, Treasure, 2 Money Counters and 3 Key holders.
With group officials now in place, LWF lends more support through trainings on the VSLA concept, basic business management skills; Group dynamics; Conflict resolution, record-keeping among others. LWF also provides material support including ‘Passbooks’ for each member, office stationery, a tamper-proof steel cash-box and a set of padlocks. With all these in place, the group members are now ready to start Share purchase; Saving and contribution towards their ‘Social fund’ monthly as stipulated by their constitution. Each member buys the number of shares that they can afford, and qualifies for a loan depending on the number of shares held but there is a standard monthly contribution towards the Social fund.
Meetings are held every month and every member is required to attend. Those who can’t attend the meeting for genuine reasons usually send their contributions to the treasurer. “Minutes are recorded in every meeting, cash in the box is counted and members’ passbooks updated accordingly to reflect share purchase, loans and loan repayment and contribution towards the group’s social fund” explains Helen, adding that VSLA yields better results when no money is left idle in the cash-box. “Members are encouraged to take loans and payback so that the group gets adequate income from interest charged on loans. This improves their financial base.” It is recommended that in the first and second year of operation, all loans should attract an interest of 10%, deductible upfront and this is then adjusted to 15 or 20% from the third year. At this point in time, the groups are normally expected to be handling bigger volumes of cash due to the individual members’ improved economic status and thriving business enterprises.
At the end of every year, the group members converge for an Annual General Meeting (AGM) where the group leadership is dissolved, new officials are elected, dividends earned from loans are shared equitably among the members, full shares refunded and the any unused social fund shared out equally. Every individual member is at liberty decide what to do with their money.
Loritit Women’s Development Group members in Letea are living testimony that the VSLA concept is an effective and dignified method of community empowerment. Elizabeth is now a proud owner of a retail shop, a food kiosk and livestock in Letea. “With VSLA money, I have been supporting my 2 children in secondary school, providing their fees and other school items like uniforms, books and I can even afford to give them pocket money” she explains. Her fellow group member known as Arukudi also took a loan from the group to expand her second-hand clothes business while another member by the name Alice bought motorbikes for her transport business.
A look at the groups records shows that all members have been regularly taking loans and repaying back, with no defaulters and the chairperson attributes this to the fact the members know each other so well. She however says that according to their constitution, loan defaulters risk having their household items attached and sold to recover unpaid loans. In 2015, the group had a turnover of about KES. 1 Million (US$ 10,000).
The Social fund has also helped members during times of need like Esther Atula who once had a sick child and was admitted at Kakuma Hospital for 5 days. “The social fund money enabled me to pay the consultation fee, medication and bed for my sick child. I don’t know where else I’d have gotten the money from and my child could have probably died. My child survived and I thank God for this group” Esther says and adds that she took a loan and ventured into livestock business, buying and selling sheep and goats.
LWF Kakuma Sub Program is currently working with 54 VSLA groups, 31 in the host community and 23 in the refugee camp which currently have a combined group share purchase saving more than KES. 11,000,000 (about US$ 11,000) circulating in the groups to support the scheme in loan disbursement. According to LWF, plans are underway to take the concept to the next level and this includes transforming the groups into co-operative societies, a move which will allow them to handle larger deposits, issue bigger loans and continue transforming the lives of members and the area in general.