Empowering rwandan communities one step at a time

2

3

Empower ing Rwandan Communities

© CARE International in Rwanda, April 2010

Documentation Project Manager, Writer and ResearcherBeatrice Spadacini

DVD Production:Giulio D’Ercole for Canvas Africa Production

Editors:Philip Christensen, Glycerie Niyibizi, Josephine Marealle-Ulimwengu

Contributors:External guests: Governor Fidèle Ndayisaba, Mayor Alphonse Munyantwali, Emmanuel Ahimana, Donat Habiyakire, and Claudine Zaninka. CARE staff: Richard Gatarayiha, Ephron Hakizamungu, Lauren Hendricks, Jeannette Nduwamariya, Glycerie Niyibizi, and Innocent Rutikanga.

Project Graphic Designer:Noel Lumbama, Noel Creative Media Ltd

Printing Noel Creative Media Ltd in partnership with Kul Graphics Ltd


iOne Step at a Time

Table of Contents

Part 1: Women on the Move Where and How the Voluntary Savings and Loans Methodology Started 1

The Rwandan Context 3

Financial Sector Reform and Microfinance in Rwanda 4

What Does Financial Access Mean? 5

Taking One Step at a Time 7

A Simple Methodology 7

Linking VSL Groups to Banks 9

The Social Fund 11

Changing Mindsets and Promoting Development from the Bottom Up 12

Saving in Rwanda 17

ACCESS AFRICA: CARE’s Program for Scaling up Microfinance 18

Part 2: Expanding Sustainable Access to Financial Services for Investment 19

SAFI Innovations 19

Starting Afresh: Four Case Studies of SAFI Participants 23

ii Empower ing Rwandan Communities

Map of Rwanda

CARE International areas of intervention

Empower ing Rwandan Communities 1One Step at a Time

Women on the MoveWhere and How the Voluntary Savings and Loans Methodology Started

CARE launched the Village Savings and Loans (VSL) methodology in 1991 in the villages of southern Niger, in West Africa. In the early 1990s, women in this part of the world had little prospect of improving their lives. Nearly everyone in these villages struggled to survive on subsistence farming.

Initial funding for the project came from far away thanks to a nation-wide fundraiser event by a network of women’s organizations in Norway who wanted to raise money for women in developing countries. CARE Norway had already worked successfully with CARE in Niger on a tree-planting project, so the two organizations decided to partner again, this time on a financial service project targeting women.

When Niger women started to organize into groups, they called themselves Mata Masu Dubara, which, in Hausa language, means “Women on the Move.”

Since then, the VSL experiment has taken on a life of its own. It has become a model for self-sustaining, village level microfinance that has been gaining momentum through a growing number of similar programs throughout sub-Saharan Africa and in Asia as well. Since 1991, CARE has launched VSL programs in 21 countries, for an estimated total of more than 54,000 VSL groups on the continent, serving more than 1 million members, the majority of whom are women.1

Experience has demonstrated that it is women in VSL groups who are the first to reap the benefits of this approach. As VSL members, women receive training, benefit from group solidarity, earn their own income and invest in what matters most to them: their families. The result is enhanced self-esteem, greater participation in public life, better nutrition, health and education for children, and new dynamics in their relationships with men.

The model has now spread and been adapted around the world. Other development agencies are carrying out similar projects across the subcontinent.2

1 Bringing Financial Services to Africa’s Poor, State of the Sector Report by CARE International, April 2009, pg.71.2 Bringing Financial Services to Africa’s Poor, State of the Sector Report by CARE International, April 2009.

Part 1


My VSL Learning Trip to Niger

by Ephron Hakizamungu, CARE Rwanda Staff

“I traveled to Niger in September 2000. I was with Louise Muteteli who was responsible for mobilizing communities in the Rwanda CLASSE project. The objective of our trip was to explore the practical impact of the “Mata Masu Dubara” (MMD) methodology, the Hausa language name used for VSL in Niger. We wanted to understand the challenges they encountered in the communities and their successes.

My first impressions were related to the size of the country, its large tract of desert and how its agricultural production was entirely dependent on rainfall. I was impressed to see that even the most destitute members of the community were committed to finding small sums of money to save. I also noticed that the majority of VSL group members were women (ie: 95%) and most of them were illiterate. There was strong group cohesion and this I will not forget, given the post war context I was coming from. The three things that struck me most about the VSL program in Niger were the systemic use of data gathered in the field, the integration of the VSL methodology and its application throughout CARE’s work in Niger.

First, when it came to collecting data, CARE Niger had developed a template that served as a map for each project, each project had to systematically provide detailed information and data. Finally, those in charge of monitoring and evaluation consolidated this information into a sort of Master template that were then shared with all program managers for further discussion and reflection about impact and charting a way forward.

Secondly, I recall that in CARE Niger income generating activities were integrated into all CARE projects because there was a need to compensate losses in the agricultural sector due to precarious climatic conditions. Income generating activities were part and parcel of all CARE projects in Niger.

Finally, all projects that had a formal VSL component had a focal person that was trained in the methodology, was responsible for following its implementation and provide feedback on progress. There was also a policy that favored retaining staff with VSL expertise and appreciated such experience in CARE Niger. Like all NGOs working in Rwanda in the post-war period, CARE Rwanda was focused on rehabilitation and reconstruction of the social fabric. One of the favored approaches was precisely that of facilitating the creation and supporting community groups. The VSL methodology gave us the opportunity to introduce something innovative into community groups that already were forming. We basically introduced the methodology in the interventions that were already happening at the community level and in the associations that already existed.

Since the literacy rate in Rwanda was higher than that in Niger, we actually introduced additional elements to the VSL Kit used in Rwanda. For instance, we added a calculator, a booklet to record savings and loans, an account logbook, a pen and a ruler.

As in Niger, the VSL methodology enabled participants to address some of their basic needs including education for children, health needs, clothes and food. VSL members also developed solidarity towards each other, a major accomplishment in post war Rwanda, they even lent to one another if one could not make their weekly savings contribution. Members also learned how to manage their income generating activity successfully and of course they became role models in their communities.

Another important achievement that I have noticed in Rwanda is the appreciation of the VSL methodology by the local authorities both at the household and at the community levels. Once local authorities realize how much progress community members make, they regularly want VSL representatives to enlist more people and to form more groups. What is even more stunning is that many VSL members, who were once marginalized in their own community due to their poverty status, gain confidence, are respected and even elected to hold community posts.”

2 Empower ing Rwandan Communities

The Rwandan ContextRwanda is one of the poorest countries in the world and is still recovering from one of the worst humanitarian catastrophes in the history of humankind, the 1994 genocide and the extended periods of ethnic violence prior to and following the genocide. Its productive and institutional capacity has been severely damaged and almost no one has escaped the trauma.

Beyond the genocide and a history of conflict, there are a number of factors contributing to widespread poverty in Rwanda. The country is small (26,338 square kilometers), land-locked in Central Africa, with a population of over 10.5 million people.3 It has a very high population density of 328 inhabitants per square kilometer.

Rwanda’s Human Development Index (HDI) for 2009 is 0.460 (rank of 167 out of 182 countries but still refers to 2007 data), and the country has a GDP/capita at purchasing power parity of US$ 870 (HDI 2009). The HD Index estimates that close to 33% of the population lives below US$ 1.25 a day. The proportion of people who are not expected to survive to the age of 40 is equal to 34.2%. The adult illiteracy rate (above 15 years of age) is estimated to be 35.1% while 35% of the population is not using an improved water source.4

The economy consists largely of subsistence agriculture, with the majority of the population (85%) living in rural areas. The prevalence of HIV/AIDS is estimated at 2.8% among adults aged between 15-49 years.5 Rwanda has a very high proportion of orphans and vulnerable children (OVC): a total of 613,000 orphans (21%), 43% of whom have been orphaned by AIDS, and an estimated 101,000 children living in child-headed households. One-third of households are headed by women.6

In terms of gender relations and improvements for the girl child, Rwanda ranks high compared to many countries around the world. The gender-related development index (GDI), introduced in Human Development Report 1995, measures achievements in the same dimensions using the same indicators as the HDI but captures inequalities in achievement between women and men. It is simply the HDI adjusted downward for gender inequality.

3 CIA World Fact Book 20104 Human Development Report 2009, Rwanda Fact Sheet5 CIA World Fact Book 20106 The Republic of Rwanda, Economic Development and Poverty Reduction Strategy, 2008-2012, September 2007.

3One Step at a Time

Rwandan landscape: the Land of a Thousand Hills.

3One Step at a Time

“CARE’s methodology is to work closely with the local authorities who are tasked to invite poor people to attend community sensitization meetings on the Voluntary Savings and Loans approach. People then organize themselves in groups and we start our first training phase. Trainings focus on conflict resolution, group management, record keeping, saving and loans management. It is very critical to involve local authorities and to identify the poorest people in the community.”

Glycerie Niyibizi, Economic Security and Development Program Manager

CARE International in Rwanda


The greater the gender disparity in basic human development, the lower is a country’s GDI relative to its HDI. Rwanda’s GDI value, 0.459 should be compared to its HDI value of 0.460. Its GDI value is 99.8% of its HDI value. Out of the 155 countries with both HDI and GDI values, 15 countries have a better ratio than Rwanda’s.7

Remittances, which are usually sent to immediate family members who have stayed behind, are among the most direct benefits from migration; their benefits spread broadly into local economies. In 2007, US$51 million in remittances were sent to Rwanda. Average remittances per person were US$5, compared with the average for Sub-Saharan Africa of US$26.8

Over the past 15 years however Rwanda has experienced rapid recovery from its devastating past. Over the last five years, the country has seen economic growth over and above 7% per year and increased political stability. This scenario has contributed to opening up the market space for small and medium sized entrepreneurs as well as established regional players.

Financial Sector Reform and Microfinance in Rwanda In the last decade Rwanda has followed an economic liberalization program, privatized the financial sector, encouraged market determined prices of financial services, encouraged entry of international players and enhanced market competition. However, in spite of these reforms, Rwandan authorities recognized that the financial sector’s ability to play its role of mobilizing savings, conducting effective intermediation, and financing its ambitious economic reform agenda would be difficult to achieve.

The Rwandan Government invited the World Bank/IMF Financial Sector Assessment Program (FSAP) to carry out a diagnostic of the Rwandan financial sector and make recommendations for further reform. In 2005 a report was produced that identified a number of weaknesses in the financial sector and paved the way for the financial sector reform process in 2006.

The “Rwandan Vision 2020” statement which articulates the Rwandan Government’s commitment to “transform Rwanda into a middle income country as well as an economic trade and communications hub by the year 2020” set the stage for the financial sector reform process in Rwanda and the Rwandan Financial Sector Development Program (FSDP), which constitutes the Rwandan Government’s response to the report recommendations, was launched in 2006.

7 Human Development Report 2009, Fact Sheet

8 Human Development Report 2009, Rwanda Fact Sheet

Making a weekly contribution to a Voluntary Savings and Loans group.


The vision of the FSDP is to “develop a stable and sound financial sector that is sufficiently deep and broad, capable of efficiently mobilizing and allocating resources to address the development needs of the economy and reduce poverty”.9

The FSDP has been made one of the key components in the Economic Development and Poverty Reduction Strategy 2008-2012 of Rwanda and has four core objectives:

1) To enhance access and affordability of financial services by developing a strong, efficient and competitive banking sector offering a diversified array of financial products and services. This includes support for the development and broad outreach of a healthy, well-regulated and professionally managed microfinance sector as a tool to extend financial services to the unbanked and to contribute to poverty reduction;

2) To enhance savings mobilization by creating the appropriate environment, developing institutions and fostering market incentives for the development of long-term financial instruments and an efficient capital market;

3) To develop an appropriate policy, legal and regulatory framework for nonbank financial institutions; and

4) To develop an efficient, secure and technology-based modernized national payment system.10

It is in this context that the national microfinance sector has been growing rapidly. According to a sector assessment undertaken in 2005, close to US$ 100 million was mobilized in the sector and $85 million was extended to over 600,000 MFI clients as credit.11 Despite a relatively high penetration rate compared to other African countries, only 21% of the active population has access to formal financial services.

9 FinScope Rwanda 2008, Draft Technical Report, November 2008; Prepared by FinMark Trust for The Government of Rwanda, Banque National of Rwanda and DFID Rwanda.

10 Ibid.11 Rwanda Microfinance Sector Assessment 2005, Enterprise Solutions Global Consulting, LLC.

What Does Financial Access Mean?

Financial access is a complex term. Making financial markets work for the poor requires an understanding of what will make access lead to effective usage, i.e. usage that allows an individual to use the financial system for economic activities, good cash management, and risk mitigation. Effective access can be defined as occurring when the dimensions of access are optimized. Dimensions of access include for example:

Physical access – i.e. being able to access a financial service within an acceptable time and with minimized “opportunity costs”;

Affordability – i.e. the cost of the service is perceived to be within the price range the individual is willing to pay. The concept of affordability is complex as an individual may be willing to pay more for a service when there is little choice or competition (this has often been noted in micro lending and microfinance) whereas with greater competition, the amount an individual might be willing to pay might be lower. The important point is that price is a factor that needs to be considered in understanding access;

Appropriateness – i.e. the service is designed and delivered in a manner that makes it usable for an individual. For example, low-income households might want a safe place to put their money but they also might want to be able to make small deposits on a regular, even daily, basis. A service that restricts transactions, where office hours do not permit deposits, is not appropriate as it does not meet the needs in such a case. Understanding needs is thus very important in designing appropriate and usable financial services.

Information on the dimensions of access is important to determine how best to improve financial access.

Source: FINSCOPE Rwanda 2008, Draft Technical Report, November 2008; Prepared by FinMark Trust for The Government of Rwanda, Banque National of Rwanda and DFID Rwanda.


Analysis and interpretation of the FinScope Rwanda 2008 data reveal that:

More than half of the Rwandan adult population (52%) manage their lives without using any kind of financial product (formal or informal);

More than three-quarters (77%) of the 48% of Rwandan adults who do use financial products, use informal products whilst 26% of Rwandan adults use only informal financial products;

Of those who are using formal financial products, most (67%) are using formal bank products with insurance and micro finance product penetration being significantly lower;

Of those who are banked, more than a third do not hold any additional informal or other formal financial products;

Bank usage is dominated by the Union des Banques Populaires du Rwanda (UBPR). Excluding UBPR, only 1% of the adult population use commercial bank products.

Member-owned savings and credit cooperatives (SACCOs, COOPECs) are the most numerous financial institutions in Rwanda. The Union des Banques Populaires du Rwanda (UBPR) is the most significant among them, serves 36% of the total microfinance market and holds 60% of deposits and loans. Thus, UBPR is a net lender to the rest of the financial sector, while at

“I would call the work that CARE does with Voluntary Savings and Loans the nursery school level. Microfinance would be primary school and when you become a big client you can go to the upper level or to university. It is very important to prepare people because otherwise many would be scared of approaching financial services. They are scared mainly because they don’t know them, don’t know how to use them, what services to demand and how to do so.”

Claudine ZaninkaExecutive Secretary of the Association

of Microfinance Institutions of Rwanda (AMIR)

the same time the rural sector is still constrained in access to finance. The low level of rural financing undertaken by UBPR is more of a reflection of the limited absorptive capacity of the real sector, due to lack of bankable projects, and the lack of organized cooperatives.

Microcredit institutions are concentrated in urban areas, with the major ones (RIM SA, URWEGO, Duterimbere, Vision Finance, Gisubizo) offering loans that range anywhere from 50,000 – 500,000 FRW (US$90-US$900) with monthly interest rates between 2-3%. The Banque Populaires are spread out in the entire country and while they have focused traditionally on less poor people (such as salaried people, traders, and cash crop farmers), they are taking up a large share of the microfinance market. These credit unions mobilize member savings (with 55% of clients having balances on their accounts between FRW 1,000 and 10,000 (US$1.834 - US$18.34) and provide loans at 1.16% interest per month (14% per year).12

Comparing Savings and Loans Associations between Rwanda and Niger13

RWANDA – CLASSE INTAMBWE NIGER MATA MASU DUBARA

Group Size 7-30 people, average 16 Groups tend to be bigger, average 29

Gender Mixed gender Women only

Type of association Not time bound Time bound (9-12 months)

Loan duration One-three months One-three months

Interest rate Typically 10 percent per month Typically 10 percent per month

Internal loan use Mostly for productive use Mostly for productive use

Social Fund Yes Yes

Record keeping Written Oral often, written sometimes

Bank account Yes Not common, but increasing

Market environment

Rural accessible with cash crop production activities

Rural landlocked with food producing potential or accessible with cash crop production activities

Population density Very high Very low

12 CARE Canada project proposal on Sustainable Access to Financial Services for Investment.13 Linkages between CARE’s VS&LAs with Financial Institutions in Rwanda, Case Study by Jan Maes, Consultant,

August 2007.


Taking One Step at a Time

The VSL methodology first developed by CARE in Niger was introduced and adapted to the Rwandan context in 1999. The methodology itself became known as CLASSE-INTAMBWE. CLASSE stands for Community, Learning and Action for Saving Stimulation and Enhancement, while Intambwe is a Kinyarwanda word term that figuratively means ‘Step by Step’. This approach was first piloted through the Rural Livelihood Diversification project in the former province of Gikongoro.

Like in Niger, the methodology consists of organizing vulnerable individuals into Voluntary Savings and Loans groups not larger than 30 people, in order to strengthen their livelihoods security. The usual target is rural and poor people who do not qualify for accessing the formal financial system. Close to sixty-seven percent of the group members are often illiterate, living under the poverty line and the majority of them are women.

The main obstacles encountered by poor people when attempting to access financial services are related to the fact that they do not possess property or capital to be given as a guarantee to the micro-finance institutions. Poor people are also perceived to be ‘high risk’ for many formal institutions and thus barred from the start from entering the market.

A Simple Methodology

The CLASSE-Intambwe methodology in Rwanda is implemented in five phases. A VSL Field Officer guide, produced by CARE, sets out the basic VSL principles, which focus on savings-based financial services, self-management, simplicity and transparency of operations, flexibility in loan amounts and terms and conditions for lending, low group management cost and retention of group earnings within the group or in the community.

Phase I is the start up phase and it entails identification and selection of group participants. This is usually done with the assistance and support of the local authorities that invite community members for a sensitization meeting on the VSL methodology itself.

A Voluntary Savings and Loans group during a weekly meeting.

7One Step at a Time


Preparatory Meetings for Implementing VSL Methodology

Type of meetingMeeting A

Supervisor orients local leadersand government officials

Meeting BField Officer introduces VSL to the community

Meeting CFirst meeting with newly

formed groups

Content

Introduction of the implementing Organisation.

Target group to be served

Services offered.

Role of local leaders and administrators

How the methodology works.

How interested individuals can form new VSLAs.

Step-by-step description of how VSL works.

Quality of good members.

VSLA and FO obligations

Training schedule

Date and place for First Training

Comments

This may take more than one meeting and may involve Regional, District and Locational/Ward officials before reaching communities.

Open meeting. Anyone can attend. Usually at a public place like a market, school, church, mosque etc.

Attended only by people who are committed to joining a VSLA and who show this by having formed themselves into a group.

Phase II focuses on supporting newly established groups and training two representatives on the VSL methodology. The criteria for selecting these representatives include the ability to read and write, the capacity to facilitate change, and the trust they elicit from other group members. It is during this phase that group members develop their internal regulations and elect their management committee.

Group members meet on a weekly basis and contribute a small sum of money to their collective fund. The weekly contribution is around 80 Rwf or (10 to 15 cents of 1US$) and is to the discretion of each individual, depending on their capacity to save. The more one saves, the more one is entitled to borrow at a later date, although the total amount borrowed cannot exceed three times the amount that one is able to save. During the first year, VSL group members can borrow up to a maximum of three times.

It is during this Phase that groups create bylaws during a general assembly and fix the interest rate for internal loans. The accumulated interest is shared among group members. The system is relatively simple and easy to follow as it is specifically designed to meet the needs of people who are for the most part illiterate.

During Phase III the trainers facilitate learning about the savings and loans methodology. After at least three months of savings and loans activities, the groups are encouraged to form their networks or Intergroupments with other groups. During Phase IV a three-day training on Selection, Planning and Management of income generating activities is provided to the trained representatives. The objective of this training is to improve group member’s investments before the group is linked to the bank.

Members are trained over a period of eight to ten months on the below modules and usually start saving after a few months:

Training Schedule

Module 1groups, leadership and

elections

Module 2Social Fund, share-purchase and credit

policies

Module 3Development of Association constitution

Module 4First share-purchase

meeting

Module 5First loan

disbursement meeting

Module 6First loan

repayment meeting

Meeting CFirst meeting with newly

formed groups

Individual self-selection.

Role of General Assembly

Roles of leaders.Preparation for

electionElections

Social Fund: policies/rules.

Share-purchase policies and rules

Credit: policies and rules.

Repayment: policies and rules.

Association governance.

Combining Module 2 policies and rules with governance decisions into single constitution.

Supervision of first meeting in which cash is handled.

Contribution to social Fund..

Share-purchase.

As per Module 4, but with first disbursement of loans.

As per Module 5, but with first repayment of loans.

Take place at the end of the cycle, or at points where there is a large excess of unused Social Funds available for distribution.

Week 1 Week 4 Week 8 End of cycle


Each VSL group has an elected and trained management committee.

“The Voluntary Savings and Loans approach is much more then a way to become financially independent. It is about changing the mentality of the people, encouraging them to become self-sufficient and to think for themselves,” says Alphonse Munyantwali, Mayor of the Nyamagabe District in the Southern Province. “The impact is especially visible on women. Those who are in these groups are more outspoken about community issues and bring their concerns to the local authorities. This is an important achievement.”

Phase V is usually after eight months of intensive training and is when groups graduate and the eligible ones are formally linked to the bank.

Linking VSL Groups to Banks

CARE Rwanda’s CLASSE-Intambwe model is different from the original model developed in Niger in that Savings and Loans groups are linked together through federations, called Intergroupments (IG). In the past, these federations were in turn linked to external loan funds (provided by CARE) held at the Banque Populaire, a network of credit unions located across the country. This is one of the most innovative features of the VSL model in Rwanda. Recently, the Banque Populaire has become a commercial bank therefore CARE will explore new partnerships with microfinance institutions over the coming years.

These structures consist of 25 to 30 Savings and Loans groups that create value by effectively linking demand for loans with the credit supply. “CARE Rwanda realized that the majority of members of CLASSE-Intambwe wanted larger loans than their internal loan fund could provide,” explains Glycerie Niyibizi, Economic Security and Development Program Manager for CARE International in Rwanda. “The link to external credit was provided to open new economic opportunities within and beyond the farming sector. In target districts, CARE deposited a credit fund with the Banque Populaires.”

In the past, CARE provided a Credit Fund of up to 100 million Rwf (approximately US$ 20,000) per IG structure for loan disbursement to its Voluntary Savings and Loans group members. Groups applied for loans as soon as one year after they had begun their weekly

9One Step at a Time

Francine Uwimana, VSL Group member, VSL network President and community Leader

“I have been a member of a VSL group since 1999. My group is in the District of Gatsibo and is a member of the Twisungane Intergroupment. We are now 22 people in my group. Only a few left since the beginning and one person died. When CARE staff came to sensitize us back in 1999, we were already organized into an agricultural association. After we were trained on the VSL methodology, we started to save 50 Rwf (0.1 US$)per week, not more than that. Initially, everyone saved the same amount of money. Now we can easily save 200 Rwf (0.4 US$) per week.

When I started, I was really poor. My husband was killed during the genocide and my children had abandoned school because we could not afford it. I have five children and I care for two of my sister’s children; she also died during the genocide. The first time I borrowed from the VSL group, I asked for 2,000 Rwf (4 US$). With that money I cultivated my plot of land and got a very good harvest.

I became more hopeful about the future and started to think that I could have a normal life again if I worked hard. I was so excited about our VSL group that I reached out to other women and encouraged them to form VSL groups and to start saving money together. Years later, these same women nominated me as their representative to the Women’s Council.

When I started to participate in decision-making processes, I started to learn many important things, for instance, the importance of educating my children, the boys but also the girls. All my children went to school. At one point I even opened an education account for them so that I could specifically save for their schooling. My participation in the women’s council also taught me to leave money in the bank and get some interest over the long-term. I learned how to save better.

When we first organized ourselves into a VSL group, we learned how to effectively work together. After about one year, we created an Intergroupment (IG). Shortly afterwards I was elected President of our network. Our Intergroupment consists of 15 VSL groups. The Intergroupment functions as an intermediary between the groups and the bank.

The bank has a CARE Fund that loans to VSL groups but as I said single individuals now also ask for loans directly from the bank and sometimes get them. Over the years, the bank has seen how much the groups are able to save and how diligently people pay back their loans. Small credit amounts come from the Savings and Loans boxes but as the groups become economically stronger, they ask for larger amounts of money and that is when the bank steps in.

All of my groups have now opened an account with Banque Populaire so that their money is kept in a safe place. We really could not keep large sums of money in a box and that is when, little by little, groups started to open bank accounts and to deposit their savings in there. Individuals can also directly ask for loans to the bank. I too have a personal account with the bank. I used to be afraid of banks. Today I can approach Banque Populaire without any fear.

In 2003 I asked the bank directly for a loan without going through my group. As an emerging entrepreneur, I got Rwf 500,000 (1,000 US$). One year later I asked for 1,000,000 Rwf (2,000 US$). I have invested in the sale of beans, sorghum and maize. I store the food in my home and sell it to intermediaries who come directly to my doorstep. I am basically in the business of food commercialization. I have paid for my children’s education and built myself a home. Recently, I bought another home as an investment for my children.”


11One Step at a Time

savings. Rather then apply directly to the bank, groups submit their business plans to the IG, which reviews it and determines if it is a solid and viable proposal.

The Voluntary Savings and Loans group can decide whether the loan from the bank is used for a group income activity, which is most common, or for individual income generating activities by one or several members. Regardless, all group members are responsible for repaying the loan through a group solidarity mechanism.

As a VSL association, the most popular investment sectors have been corn, sunflower, animal husbandry, pineapple, basket weaving, tree tomatoes and the commercialization of bananas. (See box on pg.14)

As of August 2008, on a total of 4484 trained VSL groups, 3959 are operational, 1575 are linked to a bank and 673 got a credit from it. The average credit amount given to a group is around US$ 576. The total credit value is US$ 381,531 and the outstanding amount is currently US$ 64,812. The repayment rate on the credit from the bank is 93%.

Featuring mariam mutesi, Food seller

“I have been part of a VSL group since 1999. I have five children of my own and take care of three orphans. I initially borrowed 10,000 Rwf (20 US$) for trading sorghum. I got the idea when CARE came to sensitize us about the VSL methodology. I wanted to invest in something productive. After many years I was able to open a bank account. For me the advantage to have money in the bank is that I am not tempted to use it and I can therefore save more. I used my first profit to pay for school fees. Later I built a home near me so that I could expand my business and store food supplies and the sorghum.

I only worked in the field before joining the VSL group but I never made enough to pay for all the expenses. My husband is now very proud of me and of the income I bring home. He only finds work occasionally so what I bring home is very useful. We used to have more conflict at home but now we have peace. ”

The Social Fund

The majority of Voluntary Savings and Loans groups have a Social Fund, which is established thanks to additional member contributions. Often the nominal amount of this contribution is the same as the weekly savings to the rotating loan fund, but it is only paid once per month instead of weekly. The Social Fund can be used to help members with social emergencies (such as sickness or death), in which case a member receives a grant that does not have to be paid back. The Social Fund can also be used to respond to social needs such as medical insurance or school expenses, in which case a member receives an interest-free loan that needs to be paid back with a flexible repayment period.


Changing Mindsets and Promoting Development from the Bottom Up

Perhaps one of the greatest contributions of the VSL methodology, apart from enabling poor people to achieve a more sustainable source of livelihood, is the impact it has on group member’s self esteem, their level of confidence and even their relationships at home. This is particularly evident among women group members.

“I have been really impressed with this methodology when it comes to women’s empowerment,” says Jeannette Nduwamariya, Governance Manager for CARE International in Rwanda. “Initially I was skeptical. I could not believe that by saving only 50 Rwf (0.1 US$) per week, women could achieve much but the impact has been unbelievable. I have seen many cases of women that, by saving a little every week over a period of two years, have managed to buy animals and eventually even a home for themselves. I think this is because women are more patient than men. They don’t mind taking their time to achieve their long-term goals, which is why this methodology seems to work particularly well with women.”

Women VSL members often say that after setting up their own businesses and regularly contributing to the household income, they gain more respect from their husbands.

In modern Rwanda, another important contribution of the VSL methodology is that it promotes social cohesion and solidarity in a context that only 15 years ago experienced civil war. CARE staff points out that in some groups there are both survivors and people whose relatives are in jail for

genocide. The more people work together for a common goal, the higher the likelihood that they will learn to be together again and rebuild the social fabric of their country.

VSL Data Summary

No. Items

1 Number of Women in VSL groups 51,804

2 Number of Men in VSL groups 19,883

3 Of the above number of People Living with HIV/AIDS in VSL groups 14,877

4 Number of older children heading households in VSL groups 3,856

5 Out of women and men # of Nkundabana (OVC mentors) in VSL groups 457

6 Number of VSL groups 4,484

7 Number of VSL groups linked to Banque Populaire 1,575

8 Internal Loan repayment rate 93%

9 Bank loan repayment rate 93%

10 Average individual weekly saving RWF 80

11 Cumulative saving for social needs e.g. RWF 36,001,570

12 Total value of all SLGs savings RWF 145,074,074

13 Total value of all SLG loans for investment RWF 237,829,170

“The Intambwe methodology is

very good because it brings people

together, it mobilizes them around

small sums of money and enables

many, especially poor women,

to have a return on their small

businesses. This methodology has

a big impact in terms of changing

mindsets, rendering people more

autonomous and self sufficient

instead of dependant on external

assistance.” Governor Fidèle Ndayisaba,

Governor of the Southern Province


emmanuel ahimanaSub Branch manager of rulindo Banque Populaire

We started to work with CARE in 2006. CARE gave us a credit fund of about 9 million Rwandan Francs to disburse to VSL groups. We have worked with associations that CARE has trained in savings and credits.

Working with CARE and these associations we found people were well informed and trained in credit and savings. We like to have well informed clients who know how to invest their loans. CARE provided a credit fund and this is also important to us and good for the bank.

We do provide from 10,000 to 50,000 Rwf to individual members of the associations. After the members get to know how people can access credit, they themselves as individuals ask for credits.

Delinquency rate for this branch is 4 %. Banks should not go above 5% of a delinquency rate. For CARE clients the delinquency rate is even less, around 2%. We work with an Intergroupement, network of VSL groups. Their role is to train such associations and evaluate whether or not their proposals are well thought through. They then send us a letter introducing the proposal of the VSL group. They verify whether or not the project is viable and solid.

We then call in the actual group to discuss their proposal. The Intergroupement still follows them up and monitors their activities. Since 2006 we have given out 80 loans, 38 million francs total and they have already reimbursed 35 million. We only have 600,000 francs in delinquency out of 38 million.

Most associations pay back on time. Our penetration rate increases by the day. Association members work directly with us as clients. We have about 4900 clients in this branch, 300 of them have arrived from CARE.

The most popular business ideas and credits we give are for animal husbandry, agriculture, handicrafts and commerce.

Note: Banque Populaire has recently become a commercial bank and may therefore no longer be able to operate as a cooperative that serves clients for small loan amounts. CARE is looking to diversify its microfinance partnerships.

Maize field that belongs to a VSL association group supported by CARE



Select VSL Associations that have Received a Bank Loan

Names of Voluntary Savings and Loans Group District of Location Chosen Activity

Credit Amount Received in US$

IMBARUTSO NYAGATARE Opened a shop 909

TWISUNGANE Food Product Sale 10,901

DUTABARANE Food Product Sale 909

JYAHABONAMTGRUGORE Food Product Sale 909

ABAHUJUMUGAMBI Food Product Sale 909

TWISUNGANE Cows 909

DUFATANYE Opened a shop 909

HAGURUKAMUNYARWANDAKZI Handicrafts 273

JYAHABONAMTGRUGORE Handicrafts 273

TERIMBEREMUTEGARGRE Maize production 909

ABADAHEMUKA Cows 909

ABAGABO GATSIBO Animal husbandry: goats 909

AEBU Sale of food products and agricultural inputs 2,028

JIJUKAMUNYARWANDAKAZI Handicrafts 364

TWITEZIMBERE Tailoring 1,091

ABAGORORASUKA GICUMBI Chickens 818

TWUBAHANE Irish potatoes 727

ABAGIRIWUBUNTU Cows 909

CECANGAHU Sunflowers 10,800

UMUBANO Irish potatoes 455

URUMURI Goats 2,028

TWUNGURANE Sale of food products 727

ABISHYIZEHAMWE Maize and wheat production 1,091

IMPUSEMU Irish potatoes 400

CVRU Goats 900

DUFATANYE Goats 909

ABAKORA ITUMBA Sale of food products 909

DUTABARANE GISIZA Irish potatoes 364

ABAKORANABUSHAKE Opened a shop 909

DUFATANURUNANA Goats 2,028

TERIMBERE MWOROZI Goats 1,055

DUTERANINKUNGA Windmill 900

TUGANAMAJYAMBERE Maize production 873

ABAKUNDASUKA Sale of food products 909

ABAKUNDASUKA B Goats 909

TWIZERANE Sale of food products 1,091

ABARIKUMWE Maize and sorghum production 273

INUMAYANOWA II Goats 909

ITIGANDA Sale of food products 909

TWIZERANE Sale of food products and agricultural inputs 909

TURWANEKUBUZIMA Windmill 1,164

TURWANYUBUKENE Pineapple growers 2,166

ABANYAMURAVA Goats 727

GUTABARANA Agricultural inputs 545

ABARIKUMWE Goats 727

AMAJYAMBERE Goats 549

TWUZUZANYE Cows 1455


The isaro Program: investing in women’s economic empowerment

Isaro is an eight-year program funded by Norwegian Agency for Development Cooperation (NORAD) that aims to improve Gender equality and social, political and economic empowerment for 100,000 people (80% women) by 2013.

The initial Isaro design focused on women economic empowerment through the establishment and capacity building of Voluntary Savings Loan groups. Monitoring and evaluation reports from the first phase of the program confirmed that access to financial services and the resultant transfer of financial resources to poor women, over time, has led to these same women becoming more confident, more assertive, and better able to confront systemic gender inequities.

Findings also confirm that men participating in Village Savings and Loans groups admit their families are now stronger than before, hence the acceptance of Isaro participants to integrate governance, policy and advocacy around Gender Based Violence (GBV) in phase II of the Isaro project.

Phase II, which goes from January 2010 to December 2013, aims to achieve the following six outcomes:

Solid Economic Opportunities and Linkages to Markets: 100,000 VSL group members (80% of whom are women) are able to participate in sustainable economic opportunities and are linked to market and financial services at local and national levels;

Sexual and Reproductive Choices: women have an increased capacity to make decisions regarding their sexual and reproductive health;

Preventing and Addressing Gender Based Violence (GBV): community-based managed mechanisms and strategies to prevent GBV are established and supported by local authorities. Support services for victims are also created and supported by local authorities;

Increased Capacity for Effective GBV Advocacy: women and men at the grassroots level, as well as local civil society organizations, have increased skills and capacities to carry out evidence-based advocacy on GBV and on the impact of conflict;

More Women in Decision Making Positions: there is increased participation and representation of women in decision-making processes and structures at household and local levels (village, cell, sector, and district);

Investing in Partners’ Institutional and Technical Capacity: implementing partners have increased institutional and technical capacities.

The program, which started in January 2006 and expects to end in December 2013, is implemented in the Southern Province of Rwanda. Since the beginning of Isaro in January 2006, CARE has been able to reach 37,036 new clients through 1786 VSL groups. Below is a table showing Isaro districts and Vision Umurenge Program 2020 sectors in the Southern Province of Rwanda.

South GISAGARA Gishubi CARE Direct Implementation

HUYE Maraba CARE Direct Implementation

NYAMAGABE Kibumbwe CARE Direct Implementation

NYANZA Kibirizi CARE Direct Implementation

NYARUGURU Rusenge CARE Direct Implementation

Ruhango Mwendo CARE Direct Implementation



Care Rwanda Projects Where VSL Methodology has Been Replicated

Project Name Donor Implementation Period Areas of Focus

Rural Livelihood Diversification Project (RLD)

USAID 1999-2000 Southern province: Nyaruguru, Huye and Nyamagabe districts

Community Learning and Action for Savings Stimulation and Enhancement Project (CLASSE)

USAID 10/2000 to 11/2002 Western, Northern and Eastern Provinces

Expanding Competitive Client-Oriented Microfinance Services in Rural Rwanda (ECOCOMF)

USAID 05/2003 to 06/2006 Northern and Eastern Provinces: Gicumbi, Rulindo, Gatsibo and Nyagatare districts

Project d’Appui à la Microfinance Rural/Support to Rural Microfinance Project (PAMFR)

IFAD through the GOR

01/2007 to 12/2008 Eastern Province: Gatsibo and Nyagatare districts

Strengthening New Community (SNC)

CIDA 08/1999 to 11/2001 Eastern Province: Nyagatare and Gatsibo districts

Comprehensive Closeout Strategy (COSA)

USAID through Catholic Relief Services

08/2008 to 11/2009 Southern Province: Huye and Gisagara districts

Promoting Opportunities for Women Empowerment Project (ISARO)

Norway 06/2006 to 07/2011 Southern Province: Nyamagabe, Nyaruguru, Huye, Gisagara, Nyanza and Ruhango

Sustainable Access to Financial Services for Investment Project (SAFI)

Master Card Foundation and CIDA

02/2009 to 03/2012 Eastern, Northern and Western Provinces: Burera, Musanze, Rubavu, Nyabihu, Gicumbi, Rulindo, Gakenke, Karongi, Ngororero, Kirehe, Bugesera, Nyagatare, Rwamangana, Kayonza and Gatsibo districts

Community-assisted Access to Sustainable Energy in Rwanda (CASE)

European Commission, Austrian Development Agency, CARE Austria

01/2008 to 12/2010 Southern Province: Nyamagabe, Nyaruguru, Huye and Gisagara districts


Saving in Rwanda

Over half the adult population (54%) in Rwanda claim to be saving. However, most (70%) of those who claim to be saving keep cash at home in a secret hiding place and are not using any formal or informal financial product for the purpose of saving – indications are that in most cases this form of “saving” merely serves to have cash at hand to cover daily living expenses and could not be regarded as “savings” in the true sense.

Types of savings products used by Rwandan adults who save

Savings % of Adults who save

Keep cash at home or in a secret hiding place 70

Membership or tontine/ikimina/umuryango 39

Savings at a bank 26

Give to someone else for safe keeping 14

Savings account at a agricultural co-op 10

Savings at a MFI 5

Membership of Caisse de l’Entree 1

Employer savings schemes 1

Savings at a post office 0

Capital/stock market 0

Retirement/pension 0

Pension fund 3

Apart from keeping cash at home the most common form of saving amongst Rwandans 18 years and older is through tontine or ikimina membership (39% of those who save). [Editorial Note: These memberships associations are informal Savings and Loans groups]. The most important benefits for these individuals who use these informal savings products seem to be social rather than financial in nature i.e. membership provides them with the opportunity to exchange ideas (57%) or to socialise (52%). Other types of informal savings products include “giving cash to someone for safe keeping” (14%), Agricultural co-op savings (10%) or employer saving schemes (1%);

Formal saving products used by Rwandans who save include savings at a bank (26%) and savings at an MFI/SACCO (5%);

The most common reason why Rwandans save is “to cover unexpected medical expenses (49% of those who save, save for this reason).” Other reasons for saving include “putting money away to ensure that daily living expenses could be covered during hard times” as well as for “dealing with other emergencies which are not medical/health related when they occur.”

In Kigali reasons for saving differ significantly from other areas – more than half of people in Kigali who save claim to be saving for being able to cover their expenses in the case of loss of employment.

Barriers to saving are mostly financial in nature. Almost all people who do not save refer to some form of financial exclusion as the reason for not saving e.g. “I don’t have money left to save after covering daily expenses” (81%) and “I don’t have an income – no money to save” (24% of those who do not save).

Attitudinal exclusion is also significantly mentioned – 1 in 5 adults who do not save prefer spending their money when they have it rather than saving and 1 in 4 who do not save regard it or regard saving as “for rich people who have money left after covering daily expenses.”

Source: FINSCOPE Rwanda 2008, Draft Technical Report, November 2008; Prepared by FinMark Trust for The Government of Rwanda, Banque National of Rwanda and DFID Rwanda.


ACCESS AFRICACARE’s Program for Scaling up Microfinance

In 2008 CARE launched an ambitious new program, ACCESS AFRICA, a 10-year investment whose returns are expected to be dramatic. This program aims to create access to financial services for 30 million people in 39 sub-Saharan countries by rapidly expanding Voluntary Savings and Loans Associations (VSLA), strengthening Microfinance Institutions and making them more responsive to the needs of existing and potential low-income clients.

There are more than 300 million economically active individuals in sub-Saharan Africa, yet only 20 million of them have access to any kind of formal services. Reasons cited by traditional financial institutions for not targeting this huge slice of the market include high operational costs, the fact that most enterprises operated by the poor are in the informal sector and the perception that the poor are not creditworthy.

If African countries are to achieve faster, sustainable rates of development, the poor in Africa must have access to savings, credit and insurance, and other financial products and services targeted to their needs. CARE believes that the ACCESS AFRICA program will give Africans the means to break the vicious cycle of poverty and transform into a virtuous cycle of rising incomes, improved health, better education and greater participation in their communities and nations.

ACCESS Africa will pursue this ambitious goal at three distinct levels: micro, meso (intermediate), and macro.

MICRO LEVEL: At this level, which will remain the cornerstone of the program, CARE expects to increase VSLA membership from just over 1 million in 21 countries to 30 million in 39 countries. New systematic efforts will be made to reach the very poorest, more marginalized individuals.

INTERMEDIATE LEVEL: At this level linkages will be established to strengthen microfinance institutions by 1) improving the capacity of microfinance institutions (MFIs) to reach downward to clients and upwards to formal banks; 2) Helping MFIs mitigate and overcome chronic blockages in their finance systems due to lack of access to sources of loan funds by establishing predictable streams of capital through instruments such as MicroVest, a capital-mobilizing intermediary for MFIs; 3) Developing an Africa financial grid of electronic and wireless technologies to fill vast hardware, software, and information gaps in the region.

MACRO LEVEL: Access Africa will conduct ongoing research on national policies that affect access to financial services on the part of the poor and incorporate the findings in order to aggressively promote financial environments that serve the needs of the poor.

“CARE Rwanda has been a pioneer in many areas of the Voluntary Savings and Loans Associations. They are the first country in the CARE family to experiment with linking to formal financial institutions. The lessons we have learned from them are now being spread across the Access Africa program. The SAFI project is giving CARE Rwanda the opportunity to do some exciting work on developing models to reach the poorest households.”

Lauren Hendricks, Executive Director of Access Africa for CARE USA



Expanding Sustainable Access to Financial Services for Investment

The Sustainable Access to Financial Services for Investment (SAFI) project started in February 2009 and will run through to March 2012. The MasterCard Foundation and the Canadian International Development Agency (CIDA), are the main donors behind SAFI. This initiative is implemented in three out of four provinces of Rwanda (Eastern, Northern and Western) and aims to work with 5000 voluntary savings and loans groups.

The goal of the SAFI project is to enhance the financial literacy and access to financial services to at least 108,000 Voluntary Savings and Loans members in selected sectors of rural Rwanda, 70% of whom are women. This step will contribute to greater livelihood security for at least 541,000 people. It is anticipated that at least 30% of new and existing members of Voluntary savings and Loans groups will be keen to access financial services from formal institutions like banks and microfinance agencies.

The SAFI project will achieve the overall goal through the implementation of three specific objectives:

1) Scale up the Voluntary Savings and Loan methodology already in use in Rwanda for the past decade and improve access to financial services through a multi-pronged model led by CARE’s Technical Support Unit;

2) Further develop sustainable linkages with formal financial institutions to ensure that Voluntary Savings and Loans groups can access savings, lending, insurance and other services that cater to their needs;

3) Facilitate learning and knowledge management among VSL groups, local authorities, implementing partners, other agencies, donors, microfinance institutions and relevant government ministries.

SAFI Innovations

Improved Targeting: SAFI intends to reach the poorest of the poor, the most destitute and vulnerable people in the communities. This is done with the help of local authorities and community members. CARE Field Officers also go door to door to provide further information about the VSL groups, criteria to join, expectations and level of commitment required.

Part 2

To be able to reach the poorest category of the population, the project will give priority to some of the 30 poorest sectors selected by the Rwandan Government under the Vision 2020 Umurenge Program. The Government of Rwanda has selected the poorest sector per district as a priority geographical area for public works, direct social support and financial services. In Rwanda there are 30 districts and 416 sectors.

These sectors have the following categories of poor people living below one dollar a day: the destitute (widows, landless, sick, the elderly and child-headed households); poorest; poor; vulnerable; surviving; and others. Within these categories there are sub-categories: those with land, those without land but able-bodied/employable, and those that are labor constrained. The SAFI project will promote the participation in VSL activities of the destitute, the poorest and poorer categories of people in the sectors prioritized by the Government of Rwanda.

Definitions of Poverty and Economic Status Categories

Category of Household Household Characteristics

Umitindi nyakujya(Those in abject poverty)

Those who need to beg in order to survive. They have no land or livestock and lack shelter, adequate clothing and food. They fall sick often and have no access to medical care. Their children are malnourished and they cannot afford to send them to school.

Umitindi (The very poor)

The main difference between this category and the one above is that this group is physically capable of working on land owned by others, although they themselves have either no land or very small landholdings and no livestock.

Umekene(The poor)

These households have some land and housing. They live on their own labor and produce, and though they have no savings, they can eat, even if the food is not very nutritious. However, they do not have a surplus to sell on the market, their children do not always go to school and they often have no access to health care.

Umukene wifashije(The resourceful poor)

This group shares many of the characteristics of the Umukene (The Poor) but, in addition, they have small animals and their children go to school.

Umukungu(The food rich)

This group has larger landholdings with fertile soil and enough to eat. They have livestock, often have paid jobs and are able to access health care.

Umukire(The money rich)

This group has land and livestock, and often has salaried jobs. They have good housing, often own a vehicle, and have enough money to lend to and to get credit from the bank. Many migrate to urban centers.

Source: CARE Canada SAFI Project Proposal 2008.


Investing in Village Agents: Village Agents are members of the target community and are trained to promote the establishment of Voluntary Savings and Loans groups. The Agents are paid a small fee by the groups themselves (fee-for-service basis) to provide technical assistance on the core principles of the VSL methodology and to nurture the groups along. Village agents are trained and supervised by field officers from an implementing institution over a period of 12 to 18 months.

Introducing Different Implementation Models: In order to ensure program quality, build greater local capacity, scale up VSL activities and spread this methodology as widely as possible in Rwanda, CARE will do direct implementation of the project as well as implementation through four local partners and two international NGO partners, specifically Norwegian’s People Aid and Plan International. Each international agency will in turn also work with a group of local partners.

CARE direct implementation will focus on the following Districts: Nyagatare, Kirehe, Kayonza, Rwamagana, Bugesera and Gatsibo. Through direct implementation CARE is expected to reach at least 36,300 new VSL clients. The four local NGOs will reach 38,368 new clients while the two international partner NGOs are expected to reach 28,132 new VSL clients.

CARE will provide sub-grants to four local NGO partners as well as technical support to implement the methodology. The four local NGO partners are: Duterimbere (Kinyarwanda name which means “let’s progress”, African Enterprise Evangelic (AEE), Eglise Episcopale du Rwanda (EER) Byumba and Association Rwandaise des Travailleurs Chretien Feminin (ARTCF). It is expected that each local NGO will be able to hire a full time VSL coordinator and two Field Officers. Together, all partners are expected to reach 38,368 new VSL clients.

Strengthening Linkages to Formal Financial Institutions: CARE Rwanda has significant experience linking members of savings-led groups to formal financial services. More than 1000 VSL groups have been linked to financial services offered by Banque Populaire of Rwanda through their networks or Intergroupments (IG).

These networks or IGs consist of 25 to 30 VSL groups that screen proposals for income generating activities and serve as a representative of the VSL groups vis-à-vis CARE, the local financial institutions, the local administration and the local authorities. IGs also provide training and advice to existing Savings and Loans Associations, and often train new associations in the VSL methodology but their most important function is that of being an intermediary between Voluntary Savings and Loans groups and the micro-finance institutions.

“The Intergroupment must monitor the economic activities undertaken by the different groups,” explains Innocent Rutikanga, SAFI Project Manager for CARE International in Rwanda. “They must ensure that the VSL methodology works at the group level and guarantee on behalf of the groups that ask for a loan.”

The linkage to the banks however is not automatic. After the group development phase, groups are evaluated on their repayment rate, saving use and level of investment in economic activities. Some of the key conditions for groups to be linked to banks are:


“We were approached by CARE staff and encouraged to identify the poorest people living in this district. We organized a meeting and did just that. We hope this project will help us to overcome poverty. Even today, when I look at how far we have come in only 11 weeks since the start of this project, I am impressed. The group in my area has saved a total of 73,000 Rwf and about 9,000 Rwf for the social fund. It is now much easier to mobilize people. Some got credits for the first time in their lives.”

Donat Habiyakare, Local AuthorityKirehe District, Nyarubuye Sector,

Eastern Province of Rwanda

having a repayment rate of 98% and above, investing 100% of the savings in productive economic activities, ability to implement the training on income generating activities

(selection, planning and management), and having a specific interest in applying for credit.

Given that the Banque Populaire has recently become a commercial bank, CARE Rwanda will explore the possibility of extending this type of collaboration to other Microfinance Institutions and/or banks such as Duterimbere, Opportunity International and Vision Finance. CARE will identify financial service partners who have expressed a desire to target clients of Voluntary Savings and Loans Associations. CARE will work with these partners to develop products and services that are appropriate for VSL groups and their members and will market them to VSL groups on a commercial rather than a subsidized basis.

However dissimilar from the CARE – Banque Populaire Partnership, where CARE was depositing funds as collateral the revised VSL linkage methodology under SAFI, VSL groups through their IGs will be linked to banks and Micro Finance Institutions without the external loan funds from CARE. The reason for this change is that findings from the groups that are already linked to Banque Populaire show that the loan repayment rate stands at 93% and therefore the risk to repay the loan is negligible.

Promote Learning and Knowledge Management: The SAFI project will provide important tools, models, and lessons on providing access to financial services to poor communities in Africa. The main activities for this objective will include monitoring and evaluation using CARE’s Management Information System adapted to VSL programs, impact assessment, documenting and sharing learning, including an analysis and a comparison of the three different implementation models.


“SAFI has been designed with two issues in mind: one is the economic and social empowerment of poor women who are marginalized and secondly is the need to respond to the demand from local and international NGOs to provide technical support on the Voluntary Savings and Loans methodology developed by CARE over the past two decades. In a sense SAFI is a new model that is being tested in CARE Rwanda.”

Josephine Marealle-UlimwenguAssistant Country Director for

CARE International in Rwanda

9 VUP sectors are the poorest sectors in Rwanda. Government of Rwanda prioritized one poorest sector per district (30 sectors) to receive intensive development support.

SAFI GEOGRAPHICAL COVERAGE

Province District Vision Umurenge 2020 Program Sectors9

Implementing partner

East Bugesera Kamabuye CARE

Gatsibo Kiziguro CARE, PLAN through PAJER (Parlement des Jeunes Rwandais)

Kayonza Ndego and Nyamirama CARE, NPA through AJEPRODO (Association des Jeunes pour la Promotion des Droits de l’homme), PLAN trough PAJER (Parlement des Jeunes Rwandais)

Kirehe Mahama CARE

Nyagatare Rwempasha CARE; NPA through AJEPRODO (Association des Jeunes pour la Promotion des Droits de l’homme)

Rwamagana Fumbwe CARE

North Burera Norwegian People’s Aid (NPA) through it partner Association pour le Development et la Transformation Sociale (ADTS)

Gicumbi Rubaya Eglise Episcopale au Rwanda( EER-Byumba)

Musanze Norwegian People’s Aid (NPA) through it partner Association pour le Development et la Transformation Sociale (ADTS)

Gakenke ARTCF (Association Rwandaise des Travailleurs Chretiens Feminins)

Rulindo Cyinzuzi AEE (African Evangelistic Enterprise)

West Ngororero Muhororo Norwegian People’s Aid (NPA) though TUBIBAMAHORO (Semons la paix)

Karongi (NPA) through TUBIBAMAHORO (Semons la paix)

Nyabihu Rurembo DUTERIMBERE

Rubavu African Evangelistic Enterprise (AEE)

Starting Afresh: Four Case Studies of SAFI ParticipantsLocation: Kirehe District, Nyarubuye Sector in the Eastern Province of Rwanda

All individuals featured here joined a Voluntary Savings and Loans group through the SAFI project that officially started in December 2009. These interviews were undertaken in February 2010. At the time, each individual group member had been saving for just a couple of months and for the first time in their lives they had actually borrowed money in the form of a loan from their group and invested in an income generating activity of their choice. These same individuals will be followed throughout the course of the SAFI project to better monitor progress and impact on individual group members.

“In terms of impact, I think SAFI is going to improve considerably the lives of VSL members. We are, after all, targeting the most vulnerable groups. In this context, we know that they are going to improve their lives when it comes to education for their children, health, family assets, shelter and clothing.”

Innocent Rutikanga, SAFI Project ManagerCARE International in Rwanda



Joseph Ruzibiza, Voluntary savings and loans group member and sweet banana seller.

“I repatriated from Tanzania in 2007. I lived in an area called Kaysho. My wife died three years ago when we were still in Tanzania. I have four children who live with me. The oldest one is 14 years old and the youngest one is 5. I don’t own land or a house or anything else, which is also why I cannot remarry.

The environment in Tanzania was not friendly and we were forced out. We lived there as refugees since 1994. I live in a small house of a friend who also used to be in Tanzania. My host returned after one year, at the end of the war, but I remained in Tanzania because I had elderly parents and I could not make the return trip to Rwanda with them. My father died in 2004 and my mother two years later that is when I started to think about coming back to Rwanda. I don’t pay rent but in exchange for the hospitality, I work in my friend’s field one day per week. I live here with my children. Only one of them goes to school now because I cannot afford the school uniforms and the school materials for all of them.

I borrowed from my group 1800 Rwf (US$ 3.13) and I decided to invest in sweet bananas. I buy them green and I wait until they are ripe before selling them. I usually go door to door. It takes about one week for the bananas to become ready. With the money I borrowed, I could only buy two banana caskets. The first time I bought a casket for 700 Rwf (US$ 1.22) and I sold it for 1000 Rwf (US$ 1.73). The second casket I actually sold for 2000 Rwf (US$ 3.48). I sell to people who come back from working in the fields. They are hungry and like to eat sweet bananas. I also sell them to children who return from school. I got the idea of investing in sweet bananas because people around here seem to really like them. It is a business that has potential. I would like to be able to buy more so that I can make banana juice.

I enjoy attending the group meetings. It is like being in a classroom. I go there with many worries but then I realize that other people also do not eat at night or they cannot sleep. I feel better because I realize that I am not the only one with such worries and I can share my thoughts with other group members.

I made many friends through my group. Many people helped me to save when I did not have any money to save. Now I even have a savings book. I never had a book before that showed how much money I actually have. It is great. My savings now are only 800 Rwf (US$ 1.39) because one of my children got sick and for I while I could not save enough.

In Tanzania I had land and a house but the problem was relations with neighbors. We were refugees and life is hard when you are a refugee. It was good to have a house so I cannot compare my situation before to now. Life is very hard also now.”



Cecile Nyiramanzi, President of the Voluntary Savings and Loans group and likely candidate to be recruited as Village Agent.

“My husband died in 1994. I now have a one-year-old child from his brother but his family was not helpful to me. I also take care of an adopted son whose mother was my older sister. He is now 8 years old. We were invited by the local authorities to listen to the CARE presentation about the SAFI project. It was after that meeting that we decided to form a group and to start saving. We hope this group can support us. We hope to improve our livelihood situation and to involve more neighbors. Before being part of the group most of us used to sell labor, basically work for others in their fields. It is hard to find such work every day and the pay does not really satisfy all the basic needs of the household.

We were initially identified through the community meetings as not having land of our own or owning a home and being very poor. After we organized ourselves into a group, we had four candidates for President and in the end I was chosen. When I work for others, which I still do now and then, I try to save as much as possible so that I can put away savings through the group and eventually I can borrow more and invest in my business. I save a maximum of 400 Rwf (about US$ .70) per week and 100 Rwf (US$ .17) for the social fund.

Now I have an onion business. I chose this activity because the growers are not far from here. They bring them to my house and I sell a bundle of onions for 50 Rwf (US$ .086). I usually walk around with them trying to sell them to the neighbors but many people also come by my house now that they know about my business. I cannot really sell at the market because I do not have a permit and that costs money so I prefer to sell my onions door to door, directly to my clients. I get suppliers twice per week. I spend 2500 Rwf (US$ 4.35) per week to buy my onions and sell them for 4500 Rwf (US$ 7.82) so I make a profit of 2000 Rwf (US$ 3.47) on a good week. Of course, when it rains, I cannot sell as much and this is sometimes a problem. I save on a weekly basis and use some of the money for food and for school materials for the older child.

I have been President of my group since December 2009. I enjoy this role. I am more confident now then before and can speak in front of the group without being afraid. I can also teach others. I can do all of this now. Since I have been elected I feel group members respect me more. I have high hopes for my group. After one year, we would like to invest in livestock. If we manage to stay together we could have money to open a restaurant business. People could buy a cell phone or a radio for themselves. On a personal level I hope to be able to send my children to secondary school.

My group members have high expectations of me. If I am indeed selected to become a Village Agent, they are worried that I will neglect them but I explained to them that this role is only a one day per week commitment and that I would not leave them.”


Agnes Nzamukosha, Voluntary and Savings group member and tobacco seller.

“I am an old woman and a widow. I am 67 years old and I live with one of my daughters and

her small child. I am the mother of six children. Four are married and one died. My husband

died before the 1994 war. Before the war I recall seeing many people buying and selling

chewing tobacco. Now that I had the opportunity to invest in a small business, I decided that

I would explore the tobacco trade. I borrowed 1800 Rwf (US$ 3.13). I am not afraid of not

being able to repay the money because the group is careful whom they give credit to and for

what. We know where people live and that they can repay. I did not borrow immediately. I

waited for several weeks and then decided to borrow the money.

I have been doing this business for one month already and of course I too chew tobacco. In

Rwanda this is a woman’s habit and women often come together in the evening to chew on

tobacco leaves. We chew tobacco, we talk and we keep each other company.

People like the tobacco powder I make. I make it really fine. I usually send my daughter to buy

the tobacco leaves. It can take her up to two hours to go in the location where we find them. For

500 Rwf (US$ 0.87) I get 23 leaves and I can make 26 tobacco packets with that many leaves.

I sell each packet for 50 Rwf (US$ 0.087) so I make about 1300 Rwf (US$ 2.26) minus what I

spend to buy the leaves.

I need to dry the leaves so the only problem I have is when there is no sun and it rains.

Sometimes I use banana leaves to make the tobacco packets. My priority needs now are

to buy more clothes, a blanket and to ensure that my daughter’s child can go to school. At

school she needs shoes, which is something she still does not have and I want to buy them

for her.

Before the tobacco business I sold my labor but because I am old I had a hard time to get hired

for manual labor. If my daughter was not living with me I would already be dead by now. She

is 20 years old but does everything at home.”



Pascasie Mukandayisenga, Voluntary Savings and Loans group member and avocado seller.

“I am 32 years old and I am the mother of two children, a girl who is 12 years old and a boy

who is 6. My husband died in 2003 and not long after his death I had my son. My husband

was ill to the liver and that is what caused his death. My girl attends 5th grade in primary

school. Primary school is free in Rwanda but I still have to buy the school uniform and school

materials. Before joining the voluntary savings and loans group, I used to sell labor (work

for others) but I could not always find work. Before it was difficult for me to even buy our

basic needs like soap. On a weekly basis I cannot contribute more than 200 Rwf (US$ 0.35),

sometimes only 100 Rwf (US$ 0.17) because I am a widow and I have children.

Ever since I have started my avocado business I have another source of revenue. Most of the

money I make goes towards food for the children and me. Once a week now I also manage

to buy cooking oil. Many people like avocados in this area. I usually buy them in the rural

areas where there are many avocado trees. I buy three avocados for 20 Rwf (US$ 0.035) and

sell three for a total of 50 Rwf (US$ 0.087). I walk about 30 minutes to one hour to get my

avocados and I go every week. I buy about 75 avocados every week. I have been doing this

business for about one month now and I don’t think I will have a problem to pay back the

money I borrowed because my avocado business is profitable.

Since I have been a voluntary savings and loans participant I have learned three important

lessons: I never miss food for my children; I now can buy both salt and soap and whatever I

do not sell, we eat ourselves; once I bought avocados that were too green and by the time they

were ripe, they had gone bad. Now I know I need to ask sellers to show me the avocados before

I actually buy them. I want to be sure that I buy them when they are at the right point.

People come to my home to buy the avocados but I also go door to door to sell them. I always

keep some at home in case clients come to see me. I usually carry the avocados on my head

in a large and wide straw basket. My plan is to continue selling avocados so that I can first

satisfy the needs we have at home. My current priorities are to buy sheets, a blanket for my

children and an oil lamp. In the future perhaps I would like to start buying and selling fish. I



can buy fish from Lake Victoria in Tanzania and I know they would do well here. Fish also yields

a lot of profit.

Before I got involved in this avocado business I did not go out much or talk with my neighbors.

I was marginalized because I was poor and I could not afford to buy soap. I did not feel like

going out but now I can wash myself and I even invite people into my home, especially those

who come to buy my avocados. People no longer marginalize me. The situation for my children

was similar to mine. They did not have proper clothes and did not like to mingle with other

children. They now have more friends and play with other children.

“We had a set of selection criteria for identifying VSL members. We were looking for orphans, vulnerable children, widows, returnees, people from marginalized communities and of course without land. I already see much improvement because people are starting to do small-scale businesses, are no longer as marginalized and they are able to save a small sum every week. I am very optimistic about the future of SAFI.”

Richard Gatarayiha, SAFI Field Officer for CARE in Kirehe District


Empower ing Rwandan Communities 29


Business

Empowering rwandan communities one step at a time