Throughout the semi-arid landscape of Makueni, Kenya, an area impacted by five years of inadequate rainfall, the demand for savings groups is growing. The small cohort of trained field agents describes feeling both inspired and overwhelmed by requests for new groups. The members of the groups we visited were optimistic, knowing that their small, but regular savings contributions continue to accumulate. They are able to access micro-loans to invest in small business or to pay school fees for their children. But there is evidence of hardship in the carefully recorded ledgers and well-run meetings. Members are also relying on group savings to feed their families. In the group ‘No joking at home,’ one woman credited the group with enabling her to feed her baby, while another was been able to pay for medical attention when her daughter fell sick.
While the groups are helping families to survive the drought, the increase in loans for food is both a blessing and a warning sign. As income generating opportunities diminish, the majority of loans recorded in the groups’ ledgers have shifted from investments in small businesses to food purchases and medical attention. In three out of the four groups visited, the demand for loans is higher than the total savings, and loan amounts have been reduced to meet demand. In the last month, one group recorded loan rollovers for 7 out of 11 borrowers after over a year of prompt repayment, all evidence of resource stress.
From these visits, it is clear that savings groups are playing a critical role in increasing resilience and improving DRR (disaster risk reduction) in Makueni, helping members to continue to feed their families as they wait out the drought. But as we review carefully kept financial records and sit as guests in savings meetings, evidence of stressed coping mechanisms and diminishing household resources should not be overlooked.
These savings groups were trained on SILC methodology by Catholic Relief Services (CRS Kenya), as part of the Arid and Marginal Lands Recovery Consortium (ARC) project implemented by the Catholic Diocese of Machakos.
Reader Comments (2)
Thanks for that Suzanne.
Your article reminded me of a group I saw in Niger where the members were in a drought-stricken village, eating one meal a day of relief food. The rains had stopped and never came back. They had long since given out the social fund, and distributed the loan fund, all so the members could buy food. There were no activities in the group at all, since no one had any money.
On the one hand, I was glad they had some savings to distribute, but on the other, I was aware that groups are a woefully incomplete response to a changing climate. They can be a platform for other life-saving, culture-saving, civilization-saving interventions, but all that requires careful planning and additional resources. Groups are great, but they don't stop sand dunes...
Wed, September 21, 2011 | Paul Rippey
Thanks for this Suzanne - as this is a topic that has really been on my mind and in my work lately too...
This is a post about what happened to certain Village Savings and Loan groups after the devastating election-related violence in Ivory Coast
The "warning signs" for the lending habits was a real eye opener for slower onset disasters...
Also - what about the idea that perhaps the groups can become a force for life-saving aid? When it is become about emergency response what role can these strong women and men play? How can they work with us as responders? What can they do when we make it through to the other side to recovery?
We (in IRC) are working with our VSLA groups in Ivory Coast and finding out how they dealt with the recent sweeping election violence and also trying to plan with our groups in DRC about what we can do to prepare for the anticipated election violence in regions there.
By many counts there are over 33 active or recent conflicts and crises the world at this very moment...I think this is sadly something we will all need to work on at some point.
Econ Recovery and Development Tech Adviser
Thu, September 22, 2011 | Sarah Ward