30 October 2020

Five ways Village Savings and Loans Associations can benefit cocoa communities

Empowering members of cocoa-growing communities can play an important role in tackling child labour. When farmers, particularly women, have the power to make decisions and sustain their households through other sources of income than cocoa, it can mean real benefits for child protection. That’s why, with our partners, the International Cocoa Initiative (ICI) supports the setup of Village Savings and Loans Associations, or VSLAs. These Associations have a long history supporting farming communities, but they have only recently begun to be used to within cocoa communities. ICI is building upon existing knowledge and experience to use VSLAs to increase child protection. The VSLAs implemented by ICI specifically target female household members to increase women’s empowerment and all members receive training on gender issues before commencing.

Tackling child labour

VSLAs bring community members together, empower them, and help address some of the underlying issues of child labour: principally among them, poverty, by allowing members to invest in alternative sources of income. These activities can have substantial benefits for children’s welfare, boosting their chances of receiving a quality education and lessening the risk of them becoming involved in hazardous child labour.

Breaking down barriers to finance

There is limited evidence that significant profits are made from VSLAs, but they do come with other benefits that can help farmers overcome common barriers. Access to finance and loans is one such barrier for cocoa farmers, particularly those living in remote areas where banks are often not present.

“Before the VSLA, it was difficult to get food,” Annick Kla, a member of a VSLA in Cote d’Ivoire explains. “Women also, before the VSLA, had trouble getting loans to invest in their own activities or businesses.”

Members from the community invest in the group by paying a nominal fee. This enables them to take out small loans from the collective pool, repaying the money in time with a flat rate of interest. These loans can then be invested in starting a business, improving their current farm plots, or their children’s education, and more. At the end of the year’s cycle, the group’s collective profits are then distributed to its members on a scale dependent on their contribution.

Empowering women to become changemakers in their community

Women from Annick’s VSLA were able to invest in cassava thanks to a loan from their group and were able to make a large profit. But VSLAs are not just about making money, they also empower women to become active players in their communities. Annick’s group used some of the money they made to support their local school to transport children to a nearby exam centre. The transport was costly and meant that some children were in danger of not attending their exams. Now, that will no longer be a problem. But Annick and her group are not stopping there. They want to register their school as an exam centre, cutting out the need for their children to travel entirely and ensuring that no children will miss out on their exams again.

Addressing gender issues in communities

While VSLAs cannot solve all gender-related problems, they can have an important impact on women’s roles as decision-makers in the household, as well as boost self-confidence. This is important, as when women have a more active role it can have benefits for their children’s safety. As part of the set-up of VSLAs women can also receive training on key areas related to their management of and participation in the groups. These can include financial management and literacy, further empowering participants.

Opening up new opportunities

“In the beginning, I didn’t have enough money,” Hélène explains. She lives in a cocoa-growing community in Cote d’Ivoire with her husband and her children. “When we started the VSLA activities, that allowed me to reinforce my business.”

When the VSLA started in her community, she was able to take out a loan and invest it in her business, a small shop selling clothes and children’s toys. Now, when she travels to a nearby town to sell her farm produce, she restocks her shop at the same time. “Thanks to my business, I have been able to send my children to school,” she continues. “My business has allowed us to take care of our family.”

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