Abstract: The invention of Village microfinance or Village Savings and Loan Associations(VSLA) methodology of microfinance by CARE International changed the financial industry at a time when many people had no access to affordable financial services. The village microfinance has had massive impact on the livelihoods of its beneficiaries. It has given the rural poor and the marginalized financial power to save and loan using their own pool of income. This has had a lot of impact in the household level by improving their livelihoods, education access etc. However, many households are still facing with various sustainability challenges, which if not addressed could affect the life of the family members in the long-term. The purpose of the study was to examine the influence of village savings and loan acquisition on sustainable livelihood in Rwanda. A case study of families in care of Societas Socialis Children's Villages (SOS) Kigali. The objectives of this study were: to establish the effect of the community VSLAs to the living conditions of rural families, to assess the extent to which, selection, planning and management of their small income generating activities influences sustainable rural livelihood, to examine how quality of trainings impacts sustainable rural livelihood through VSLAs in Rwanda. Descriptive research design was used to collect quantitative data from a target population of 108 active members of VSLAs from SOS in Rwanda. A sample size of 85 respondents, and 3 TOTs within SOS village in Kigali. Data collection was done using questionnaires which were administered to the respondents who are members of the village saving and Loan Associations. Content validity was used to establish the appropriateness of the instruments while half-split method was used to establish reliability. Quantitative data from the field were processed using SPSS (Statistical Package for Social Sciences) Version 21. The analyzed data was presented in the form of tables using frequencies and percentages. The key findings of the study are as follow: the average monthly income of the old VSLA participants is statistically significantly different from and larger than those of the non and new participants. Further evidence from regression analysis showed that there is a positive and significant relationship between participation in VSLAs and household asset accumulation. Considering education, the mean education expenditure of the old VSLA participants was found to be statistically significantly different from and larger than those of the non and new VSLA participants. The results also show that participation in VSLAs significantly reduces the probability of having school drop – out children in the family. Lastly, it was evident that participation in VSLAs and the monthly savings made by the VSLA members into the association’s savings pool have a positive and significant impact on the number of IGAs initiated and being operated by the participants under the study. Overall, the conclusion of the study is that based on the evidence gathered, VSLAs are playing an important role in enhancing rural household welfare, manifested by; improvement of household income, supporting household asset accumulation, supporting the education expenditure for rural household’s children, reducing the school drop – out rates amongst rural households and supporting the development and diversification of IGAs by households. It is therefore recommended that; the government and development agencies should encourage the development of VSLAs and the general community should be sensitized about the significance of savings. Other activities like agricultural extension services can be integrated into the activities of VSLAs, and formal financial sector actors can design policies which include creation of linkages with the rural - based financial services associations like VSLAs.
Keywords: financial services, sustainable livelihood, VSLA, SOS Rwanda.
Title: CONTRIBUTION OF VILLAGE SAVINGS AND LOAN ASSOCIATIONS ON BUILDING SUSTAINABLE RURAL LIVELIHOOD IN RWANDA: A case study of families in care of SOS Children's Village Kigali
Author: NIYIRERA SOLANGE, Dr. PATRICK MULYUNGI
International Journal of Management and Commerce Innovations,
ISSN 2348-7585 (Online)
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