A lawyer by training, Evelyn Nassuna has spent the last 18 years advocating on behalf of women farmers at local and global forums, testifying before the US Congress, and working directly with farmers in East Africa to design and implement agricultural development projects with development aid organizations. However, these projects often failed to increase smallholder farmers’ productivity and income. Why? There were few financing options that were customized for farmers to invest in land for production, inputs and value addition equipment for optimal production and marketing.
In order to address the challenges faced by farmers, including the lack of collateral and credit history, she began to integrate community savings groups in all the projects she designed. Savings groups are very basic and informal financial systems. Typically, a group of 30 people are trained how to save, purchase shares and eventually internally lend with one another. While the savings groups were successful in helping the farmers save for consumption, they were unable to save for both consumption and investment in agriculture. The savings groups not only ‘’shared out’’ all the capital accumulated in a given year, but the funds collected at each meeting were often not enough to meet the credit needs of the respective members at the same time. Failure to access capital for investment often resulted in low farm productivity and limited crop sales, which resulted in low incomes from farming.
Women face greater barriers to access to capital than men, who because of their inability to own land, lack the assets or collateral to access the credit that would inform their rights and decision-making to invest in agriculture.
It is for these reasons that Evelyn founded Shared Action Africa to support more women and young people to leverage the social capital built through the savings groups to build wealth. It is from these groups’ savings that they borrow to take their children to school as well as invest in agriculture including maize, coffee and beans as well as receive support to access land and financing.
Evelyn has identified women’s and youth led savings groups to whom she has begun to give training in financial literacy and governance. They meet regularly to discuss their business plans and invest in their group fund. But their resources are limited. With a loan to members of the savings groups, we can leverage their resources to increase their investment in agricultural inputs, labor for optimal production and impact for the upcoming farming season.
With a matching grant to the savings group, we can also leverage their resources by doubling their investment in value addition equipment to diversify their members’ incomes
By developing the financial infrastructure that is led by the community, that incorporates youth vocational training and scales green business models, we are creating jobs and sustainable livelihoods for families and future generations. Watch this ripple effect happen – join us today.
Why Financial Services for Rural Women?
Financial inclusion for the rural women is a catalyst for achieving gender equality and economic empowerment of women.
Why Financial Services for Rural Youth?
Why Savings Groups?
To address their exclusion from the formal financial services, the rural poor particularly the women and youth have built savings and credit groups as their own finance pool or small community banks serving families’ basic financial needs. Typically, a group of 25-40 people is trained on how to save, purchase shares and eventually internally lend with one another. While the savings and credit groups are accessible and bring the poor people to work, they save for consumption, and not for investment. When savings groups accumulate capital, it is redistributed or ‘shared out’ for purchase of a few consumables, which becomes a vicious cycle of saving and consuming. If the savings groups could accumulate capital, they would use it to engage other stakeholders including financial institutions and government for favorable rural financing options.
In addition, since savings groups are a grouping of few individuals (25-40) maximum, their actions are excluded to those few people. Since the group is small, each savings group can only save and borrow micro amounts. As they operate in small micro fragile groupings, they cannot accumulate adequate capital to start a fund that can be leveraged. Consequently, the members of the savings groups participate at the lowest level of the agricultural value chain, produce little, get farm prices and sometimes forward sell their farm produce.
In addition, the majority of the savings groups are neither formally registered nor own bank accounts. They often keep their money in cash boxes that are prone to theft and also lack a track record of their financial operations.