09/18/2026
Q&A: Village Savings and Loan Associations
Q: How does a Village Savings and Loan Association work?
A: Village savings and loan associations allow people like Againmore Dziva (pictured) in Zimbabwe who don’t have enough income to meet all their needs to pool their resources and support each other. Members of their group would never meet the financial requirements for a loan at a typical bank, but their VSLA allows them to invest in each other in ways they couldn’t have before.
Q: Where does the money come from?
A: Each member of a VSLA pays a set amount to join, $10 to $20 is typical. Then each month, they each contribute a fixed amount, ranging from $6 to $25 for different groups — up to a week’s wages for some. All the VSLAs that MCC Partner SCORE supports were also given $250 of seed funding from MCC’s LINCZ initiative, creating a starting pool of between $300 to $710 depending on the size of the group.
Q: How does the money get used?
A: Each VSLA meets monthly, led by their elected treasurer and chairperson, and each member presents their needs that month; school fees, medicine, food, livestock, a new fence, etc. Everyone presents to the group, and the total pot is divided up fairly amongst the members. In some cases, the VLSA might opt to collectively invest in nearby small businesses as another way to generate profits.
Q: How can a VSLA grow so quickly?
A: Whatever someone withdraws from the group fund, they’re expected to pay back the amount they withdrew with 20% interest, in addition to their monthly investment. While 20% could be considered predatory if it were charged by a bank, it’s by design for these VSLAs. It not only encourages members to consider amounts that are realistic to pay back within a month to create sustainable growth, but it also means their total fund can grow aggressively in the right conditions.
Q: What if someone can’t pay it back?
A: There are policies in place for rare cases where repayment isn’t possible under those terms, but the members are already in community and want to see each other succeed together. Once repayments are logged and the coffers are reloaded, the process begins again and a new month’s needs are presented.
Additional Info: This project was funded in partnership with Canada’s International Development – Global Affairs Canada and MCC’s LINCZ initiative. LINCZ helps communities across Zimbabwe lead their own solutions to adapt and thrive in the face of climate change.
MCC/Fairpicture photo/Tendai Marima