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DCA-Digitalisation-of-VSLAs-June20

DCA Digitization of VSLA

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CHARLES ODOKI OKELLA
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30 views

DCA-Digitalisation-of-VSLAs-June20

DCA Digitization of VSLA

Uploaded by

CHARLES ODOKI OKELLA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Digitalization

of VSLAs and
improved
access to
credit in
West Nile,
Uganda

Financial Institution
Partners
Background: VSLAs in Uganda
The digital and bank linkage VSLA solution is in
Structured savings groups like Village, Savings
line with what Uganda envisions in its National
and Loans Associations (VSLAs) are common in
Financial Inclusion Strategy (NFIS 2017-2022). In
Uganda. VSLA is a micro-finance model under
the strategy, ICT is regarded as an important
which savings groups are formed at community
accelerator of development to provide e-services
level to strengthen resilience by financially and
to rural communities in different sectors
socially empowering poor and vulnerable
including finance.
people, supporting women to save money and
get access to affordable small loans. VSLAs have This project addresses 2 of the 5 pillars of the
had a huge impact on these groups, reducing National Financial Inclusion Strategy (NFIS)
dependency on aid and strengthening members’ strategy- Reduce financial exclusion and barriers
resilience to economic shocks. to access financial services; and Deepen and
broaden formal savings, investment and
While VSLAs have transformed rural &
insurance usage.
vulnerable people’s ability to save money and
The project is being delivered in 3 phases—
empowered them to increase earning potential,
the absolute amount of capital held remains Phase I - Digitalization
small and has not resulted into significant
growth of business activities to make women Digitalization will increase productivity and
completely financially secure improve operational efficiency of VSLAs through
automation of manual tasks, improved
accountability and reporting. Generating this
The Product digital body of savings data is critical first step to
create a “reputation score” for each member
DanChurchAid in Uganda, in collaboration with and is an important component of other
Ensibuuko, in 2019 launched the “Digitalisation functionalities that are planned on the platform.
of VSLAs and improved access to credit” a
project to further financial inclusion by digitising Phase II – Bank Linkage
VSLAs and improving access to credit for VSLAs Digitalization of the processes and records of
with a digital solution named “Mobis” a cloud- the VSLAs reduce the cost and risk of lending for
based VSLA & microfinance management Banks and MFIs, giving them visibility of the
platform designed uniquely to replace current groups’ and women’s track records, while taking
practices by digitising the existing paper-based away the risk of moving cash. Integration with
ledgers. It covers typical savings groups Banks and mobile money wallets will allow
transactions and record-keeping usually done by savings groups members to receive their loans
the secretary. Group secretaries can add and make repayments without needing to travel
members’ information and use the app to log to a Bank and in situations where they cannot
members transactions during meetings. attend group meetings.

The next phase is linkage of the VSLAs to a Phase III – Digital Marketplace
financial institution. We have partnered with
Equity Bank and Vision Fund. This will enable For the final phase, the focus will be on
acquiring and onboarding of merchants to
availability of affordable loans to the groups to
support a vibrant ecommerce marketplace. This
meet higher capital needs by savings groups
functionality will enable opportunities for VSLA
members, opportunity to open savings accounts
and access other FSP services like members to trade their goods and services on
the platform, access to wider market and
microinsurance.
benefit from competitive pricing.

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