Without good management of money, farming can be tedious and unrewarding. This is why the strawberry farmers of Nyeri have formed a Village Savings and Loans Association (VSLA) group, which has been instrumental in growing their investments
members get together and contribute between Ksh50- Ksh200 and borrow against their contributions, which they repay after a month with 10 per cent interest. The amount borrowed depends on the contribution of the individual.
This concept was introduced by Lutheran World Relief where intensive trainings were conducted, continuous follow ups and sensitizations to all strawberry farmers for them to realize maximum economic benefits from their commercial farming
The project targeted to reach 1000 farmers but managed 600 currently in VSLAs rated at 60% which confirms a very high adoption to the VSLAs.
It is important to note that the number of those who first joined the VSLA groups grew very fast and will continue growing mainly for the purposes of savings and loans to support agricultural input access, school fees and other basic domestic needs. A total of Ksh 500,000 ($ 5,000) to date has been saved and the same loaned out to the 13 VSLA Groups.
The VSLAs follow a constitution that the farmers come up with. Members are trained in finance and table banking by a Lutheran World Relief project officer who work closely with government extension officers to enable them to acquire the skills needed to invest their money wisely.
“VSLAs have supported members of the group and nobody lacks households furniture,” says Ms Muchangi, a strawberry propagator in the area.
“Growth has been very fast due to the support of the group.” The association has rules and regulations and if a member is unable to repay the whole amount within a month, they can pay the interest and roll over the loan to the next month.
“VSLAs play a critical role amongst small-holder farmers as they provide a simple table banking system that allows for those who may not have access to loans and funds, to get financing to grow their investments. The farmers guarantee and give each other ideas on what to do with the money. VSLAs may sometimes circulate millions of shillings, especially where members have been empowered and stabilised financially. In such cases it is not uncommon to find a group of farmers expanding their investments by buying land and some will even develop the land, “says Mr Ngatia, the Lutheran World Relief project officer.