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I’m now in Masvingo (pronounced Mah-SHEEN-go), in the middle of the country. Something like the St. Louis of Zimbabwe. Yesterday and today I met with another 31 cluster facilitators, as well as the staff in the NGO’s office here who orchestrates the whole village savings and loan shabang.

I feel like “Village Savings and Loan” is the huge secret the world hasn’t heard about yet. Last week I spoke with 3 Emory students about their interest in getting into microfinance, and most of what they know is just Grameen and Kiva. If it hasn’t been heavily publicized, folks just don’t hear about it.

VS&L is a model of group-run savings and loan projects; the members (anywhere from 7 to 25 per group) invest savings every week into the group, and then any of them can borrow from the group at about 20% interest — per MONTH. (It’s 20% in Zimbabwe, 10 to 30% elsewhere.) But when they pay it back, does the profit go to a foreign bank or microfinance institution worth millions (cf. Compartamos)? No. It goes back into the group, becoming more money for it to lend out or use to buy stuff for the whole group, like groceries, kitchen utensils, or school fees.

As I began to think about it, I realized that using a bank just means paying them a bit for their help. My savings is money they can use to lend out and make money, and any loans earn them interest. I get the service, they earn off of me. What the poor lack in money, they often make up for in time, and so they can spend the extra hours sitting under a tree out of the hot sun, collecting savings from each other and loaning out, operating their own mini-bank. (And honestly, it doesn’t take that much time, perhaps a few hours a month once they’re up and running.) And they get to keep the profit – 20% a month, a rate any banker would drool over.

So yeah — VS&L is pretty awesome. Fortunately, the model is spreading. The Gates Foundation is spending north of 10 million dollars to scale VS&L’s to reach 30 million Africans by 2018. And it’d be great if we could tack on some business literacy education in a cheaper and more scalable way, which is why I’m here.

One more impression, randomly: Zimbabwe is very pretty, but not just in a “vast plains of Africa” kind of way. Large swaths of the country are verdant and super green, so that the effect — what with the granite boulders strewn about — is a bit like western Ireland. In fact, I met an Irish priest here two days ago whose thick accent made me do a double-take. No joke.

Or if it was, something like, “OK, so there’s this Irish priest in Africa, right?…” I’ll work on the punchline; get back to me.

This is today’s session in Mapanzure, a rural area near Masvingo. My laptop is resting on an empty Coke crate.

1 COMMENT
Raj
May 11, 2010
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Andrew Great to keep up with your Zimbabwaen Odyssey

Regarding VS&L – this predates Grameen and most other MF structures. If you do a little digging almost all cultures – African, Chinese, South Asian, – have some form of the VS&L collective savings. In fact most immigrant groups brought this to US when they came here.

The roots of micro finance can be traced to these earlier informal pooled lending systems like Indian Chit funds or tontin in West Africa. In those systems a group of people met regularly, say monthly, and contribute a fixed amount to a pot. Each of the group members has an opportunity to borrow the month’s pot to meet their capital needs. MFIs took these basic principles and provided capital, structure and organization to formalize them into a scalable lending mechanism.
More listings of such organizations worldwide http://www.gdrc.org/icm/rosca/rosca-names.html

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