The low levels of financial inclusion among farmers in Ghana and the difficulty in accessing loans from financial institutions remain a major challenge affecting the agriculture sector.
However, the introduction of Village Savings and Loan Association (VSLA) by Plan Internation Ghana, an NGO in Konkombakope a deprived farming community in Afadzato South District of the Volta Region, has brought access to soft loans to the doorsteps of the peasant farmers.
Farmers no longer contribute foodstuffs and goats to Managers of financial institutions as bribe in their daring quest to get loans.
“At first we contribute about 100 tubers of yam plus one goat to give to the Bank Manager at the Rural Bank that we request for loan. You will go round the whole year they will not give you.They also have agents that if you want to see Bank Manager you have bring Yam,and goats so that we send to them so that he give us loan. I can tell you since this savings in a week we are able to get Gch500″an opinion leader in Konkomba Kope told mybrytfmonline.com.
VSLA provides a simple and accountable system for savings and loans for communities who do not have ready access to formal financial services such as banks or microfinance institutions.
Each member of the savings scheme must at least buy one share which is Gh5 per week and at most five Shares.
“One share contains Ghc5 so the whole share is Ghc25 cedis”
Each member of the VSLA has a Passbook in which records are kept on the number of shares a member buys each week.
Savings are kept in a secure despite box which is held in the community. The box has three different padlocks, with different people keeping the key for each.
A fourth person keeps the deposit box, meaning the consents of all four persons are required before the box can be opened.
Members of the savings group are entitled to loans with little interest from the collective savings. The interest that would be accrued by the VSLA during the course of one year is shared out among members according to number shares bought.
After the share-out of savings and interest, the process begins again for another year, and the group may decide to change the price of each share for the coming year in an annual general meeting.
“When you want loan and we check your amount that you contribute then we give you three times. The interest too is 5% .so when you take loan in three months’ time you bring the capital. Every month you have to pay the interest” Nssando Timothy explained.
This savings and loan has been beneficial to Farmers in KonkombaKope
“It is helping us .Now we get loan for farming. At first our boys they were not having motorbikes but now people take loan to buy motorbike and they have started paying. When they harvest their yam, they sell and pay their loans”
Apart from having access to loan to do businesses, women in this community get quick loans for maternal services.
“at first when you are pregnant it is difficult to get money to buy things needed to go to give birth so the nurses will insult you when they ask and you don’t have it. But because of this loan our husbands will just go for loan to buy everything that the baby need.so it has helped us very much”
“Apart from that, the loan helps us in our small businesses as women.” Rita stated.
Source: Mybrytfmonline/Obed Ansah
