Women’s Economic Empowerment and Financial Inclusion
Women’s economic empowerment plays a key role in our Theory of Change. As an organisation we recognise poverty and dependence as invariably linked with violence and abuse.
At MIFUMI we aim to deliver women’s economic empowerment through
- Social economic development
Our main devices to achieve female economic empowerment is through:
- Raising our Village Savings and Loans Association (VSLA) and supporting its transformation into an influential and empowering body
- Training individuals into mastering skills such as agriculture, business and financial literacy for sustainable economic success
- Teaching development skills on issues like nutrition, food security, and land rights of women
The link between violence and financial dependence
Violence against women results from the interaction of related social and contextual factors such as inequitable gender norms, economic conditions, and weak implementation of legislation; as well as personal factors such as power issues and behavioural norms. Poverty and dependence are factors that aggravate violence by limiting both access to help, and choices for survivors who may not afford to pay for required services or will have to return to and depend on the abuser after receiving assistance. Through offering women the financial opportunity to start businesses through the Village Savings and Lending Association Allowance we ultimately set them up for a future of success and freedom to escape abusive relationships.
Village Savings and Lendings Association (VSLAs)
The economic empowerment of women has always remained a major part of MIFUMIs work starting with the initial micro credit programme which was launched in 1997 based on the Grameen Bank group lending methodology. In this programme small loans were given to women in groups of 3-5, who would provide a guarantee to each other to repay the loan over 6 months with interest. The loan scheme reached more than 900 marginalised women in self-managed groups, with low cost accessible loans. Besides increasing the participation and organisational influence, beneficiaries of the scheme were able to meet most of their practical needs and a number of them realised ownership of strategic assets such as land and agricultural equipment.
Despite positive outcomes in many cases there were a few organisational, and environmental challenges that affected the programme with some negative consequences. These included low repayment rates associated with loan diversion, limited understanding and enforcement of group rules and procedures by beneficiaries, business failure due to relatively limited markets for the products, unpredictable weather and trade in perishable goods, and delivery problems such as late disbursement of funds and poor targeting of the micro loans.
To combat these challenges MIFUMI introduced a special loan as well as a macro loan with the ability to repay as an added criteria. These special loans were bigger and were also made available for men and youths, a further advantage was that they also included grace periods and lower interest rates. We also introduced the macro loan which was given to groups to set up businesses such as grinding mills, training centres etc. The revised products were however limited in terms of the numbers who could benefit given the overall pool of funds available, and the fact that eligibility was restricted to those who could afford repayment.
It is at this point that MIFUMI introduced the Village Savings and Lending Associations (VSLA) model set up to target those most in need and help to ease their access to money and furthermore increase household incomes, reduce transaction costs and create opportunities for networking and leadership by women.
With our VSLA loan beneficiaries form themselves in groups of 10-30 and undergo weekly training over four months and then make regular savings which is subsequently lent out to individuals in their groups to be repaid by the end of the year. We also encourage beneficiaries to keep a social fund which is to be used for emergency situations as decided by the group. At the end of the year all our group members share out their savings and profits made from the loans and later repeat the cycle again.
Where MIFUMI is at now with preparation for the programme
In our effort to promote Women’s Economic Empowerment, we have been successful in getting over 500 women into leadership positions in their respective VSLA groups. We have also successfully supported the groups with training in the VSLA methodology, provided support to enable access to gender based violence services (medical, legal, psychosocial and protection) efficiently facilitated savings and lending activities and facilitated group meetings, membership recruitment and retention.
We have also recently worked with a number of farmers to explore the commercial production of CHIA and start cooperative formation with the groups. To this end, 62 acres were cultivated by 37 farmers yielding almost 2 tons of CHIA which MIFUMI is currently helping to find a market for.
All the groups have also already been sensitized into cooperative formation activities and the district commercial officer has been engaged on the subject of the groups’ registration which is underway. At the moment (July 2015) there are 116 savings groups across the 21 sub counties of Tororo district, with 3480 beneficiaries whose majority are survivors of domestic violence. Together they have a total savings collection of 303,680,000 Ugandan Shillings and have disbursed loans worth 287,733,200 Ugandan Shillings. We also take pride in training, and have trained over 41 community workers who now assist with support and supervision at a group level. The voluntary savings aspect of the programme is now very much appreciated by the groups.