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Using the Village Savings and Loans (VSL) scheme as a strategy to link 2,500 small-holder farmers to financial resources/institutions.

CTF will organize, teach the VSL idea, provide VSL kits to groups and link them to financial institutions (banks) to access to loans.

Photo of Alimamy Bangura

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Our innovative idea is commonly called - The village Savings and Loans (VSL) Scheme. This is a unique methodology of linking community small scale producers to financial institutions in order to access agricultural loans from the banks. The Village Savings and Loans (VSL) scheme is a self-empowerment methodology wherein community small scale producers come together with the aim of mobilizing resources for themselves by contributing their individual savings to a loan fund, which, in turn, made small loans available to members. The concept has quick, simple and transparent systems of transactions and accounting during implementation which builds up the confidence of participants of the group. The self-saved monies are securely deposited in a three pad-locked metal box of which the keys are kept by members in a rotational manner. When savings are high, the groups will open bank accounts to deposit the excess. By this way, the members can have access to loans from the banks. The VSL scheme is a confident way for the bank to give out loans to the groups to engage in commercial production. The problem of increased food production is solved in the communities. Accessing loans will ensure commercial production of food crops. They can use the loans to buy inputs for commercial farming. The VSL scheme will ensure the availability of funds in the community at all times of the year. They have a social fund savings to settle down emergency problems among members in a group-solidarity!


The key beneficiaries of this initiative include youth girls and women residing in rural poor communities. In our experience over the years, it is proven that women have been very successful in the VSL scheme than men. These women VSL groups will benefit a capacity building on the methodology. The methodology will enhance sustainability as community can do the VSL on their own. They will also benefit from VSL tool kits. They will benefit from Council registrations and opening of bank accounts.


The VSL scheme will be implemented in five chiefdoms in the Port Loko district of northern Sierra Leone. The project will now target 2,500 vulnerable and marginalized community people that cannot afford to access financial resources.


  • Yes


  • I’ve worked in a sector related to my idea for over a year


  • Yes, for more than one year.


Cotton Tree Foundation is a legally registered National NGO in Sierra Leone and have worked with various partners to significantly contribute in bringing about sustainable transformation of deprived rural poor into responsible and empowered persons. The VSL has been proven to be the platform on it.


The VSL scheme initiative of linking small holders to financial institutions for loans to expand their farming activities is not a new idea with Cotton Tree Foundation Sierra Leone. It was initiated after the central government has established community banks in the country but with still challenges for small holders to access these facilities. Community people lack the basic criteria to be linked to these small banks to access loans. CTF therefore piloted the initiative in two small communities that are producing rice and cassava products. The poor farmers were organized into VSL groups and carried out their savings with the intent to be linked. They registered and opened accounts and seek for agricultural soft loans which have minimal interests. One of the community used the loan to buy a cassava grater to add value to their cassava and start selling gari, starch and cassava bread thereby increasing their income generation. CTF guided the members to do successful repayment and today the machine is owned by them. Similarly, the rice producers borrowed money to buy a rice mill to mill their rice in the villages. They realized more money and paid back the loan and owned the machine.


The uniqueness of this idea is that, it is bringing solidarity among members and self reliance in a sustainable approach. The VSL beneficiaries will start doing things on their own before they will be linked to financial institutions which is the ultimate aim. People are organized to carry out their own savings after being trained on the modules of VSL scheme on their own for one year. Cotton Tree Foundation has professionals in its organization that are capable of carrying out the implementation successfully. CTF can deploy extension field staff at targeted communities that can carry out the monitoring of the VSL scheme. They will give guidance to the group members on the processes of savings, opening of bank accounts and linking these small holders to access loans. CTF ensured that loan re-payment is being done successfully by monitoring VSL books of the members. CTF has well developed modules of the VSL scheme that are normally used to build the capacity of small holders on VSL methodology. The training will support the members to conduct VSL activities successfully to move on other levels.


Cotton Tree Foundation is a national NGO that has offices in three districts in northern Sierra Leone. It has both management and technical field staff that work for the organization. The technical field staff will directly work with the VSL groups and they will bring field updates of the implementation from the communities. There are weekly work plans going to be used to implement the initiative. An M&E officer of CTF will be responsible to verify and upload the reports of the extension staff.


Initially, CTF intended to limit the implementation in only two chiefdoms. But after getting beneficiary feedback, the organization is now aiming to target more coverage area. The piloted communities have ignited other smaller communities outside the chiefdom for carrying out such idea in making themselves self-reliant and sustainable. Community heads and other stakeholders in other chiefdoms and districts are coming to CTF office to request our intervention in this initiative for their people. Therefore the idea of limiting this implementation in the two chiefdoms has changed to cover more areas in northern Sierra Leone to enhance sustainable and improved livelihoods for small holders that reside in those marginalized communities. This means that, instead of the 1,000 beneficiaries, the VSL scheme initiative will now increase the number to 2,500 beneficiaries in CTF's operational districts in the country. The program will target groups of farmers that engage in annual and permanent tree crops, livestock and petty traders of small and medium business in vulnerable communities. These small holders are interested in VSL to seeking loans from the community banks.


There were doubst for the success of this idea with small farmers. Small holders are our main target as they are the marginalized. CTF has proven that smaller communities are doing better in VSL linkages once they are well organized and are being supervised. The two piloted communities are very small villages with vulnerable people and have succeeded. The introduction of the scheme for smallholders by CTF and with supervision by our field staff, they will able to achieve the objective of improving their livelihood through linkage at community banks. Today, other smaller villages are poised to do likewise as they believe that its the only way to build their livelihood sustainably.


The priority of the government is to ensure that farmers have access to financial institutions through constructing community banks around the country. A major problem that was not solved is how can small holders have access to bank loans when they lack the criteria to do so. This prompted CTF to initiate the VSL scheme methodology. This is in order for vulnerable small holders create a way of accessing financial banks. With the VSL, they save, open account and deposit meager amounts as co-laterals. By this way, they can access small loans that have minimal interest and longer periods to repay back. Individually, they cannot access loans but as a well organized group, they can access loans.


The long term objective of this idea is to establish farmers' cooperatives of small holders. As this initiative will be targeting different farming groups that are engaged in different farming activities, these farmers will be grouped based on the type of farming they are engaged. Rice growers, cassava growers, potato growers, livestock rearers, cashew growers and so on will be organized into cooperatives. These cooperatives will be linked to bigger banks to bigger loans as farming cooperatives.


  • More than a year


  • Within 100 km of where our team does most of its work


  • Between $100,000 and $500,000

The VSL scheme initiative of Cotton Tree Foundation Sierra Leone is a sure way to link small holders to financial institutions. It usually starts with the formation of smallholders into VSL groups. These groups will then be trained on the various modules of the VSL. During the training session, the members are capacitated in governance structures which upkeep the scheme. The trained groups will also be provided with VSL kits in order to start their regular meetings and savings. The VSL program is purely based on participants’ savings, which means that initially members only work with their own assets and not with loan liabilities (debts). VSL activities are immediately profitable (not merely sustainable) and are fully autonomous. Being a community-led methodology, all transactions of the VSL are carried out at meetings in front of the association, to ensure transparency and accountability and the activities are self-managed by the participants. The model has a distribution system which allows all participants in a group to acquire useful amount of capital at a predictable time that can be invested in longer-term activities or meet immediately large predictable expenses. The members are obliged to loan from their normal savings and re-pay with a minimal interest which they are always willing to pay because that interest belongs to them. 

When the pouch would have reached certain amount, CTF will then facilitate the registration of these groups to the district council and the ministry of agriculture. The registration certificates will be used to open bank accounts for the members of which three executive members of each VSL group are usually signatories. No sooner the farmers are able to open an account, they can develop a business plan and a loan request for submission to the bank manager. In this way, they can have access to agricultural loans from the bank. Once the loans are secured, the groups can be able to engage in commercial production and marketing of food crops in the locality throughout the year of the loan.

At the end of the VSL cycle (which is normally a year)  members will share out their accumulated savings and interests based on a setup formula, that is the share out is based on the amount of shares bought during the scheme.VSL scheme is usually repeated in every community it is established. It most times existed in communities even after the end of the project cycle. Cotton Tree Foundation as an NGO has ten groups which we established in the South of the country over five years ago. Those groups are still existing as VSL associations carrying out their savings and loans activities always. Linking these groups to financial institutions is the surest way of helping rural poor farmers to have access to loans and other facilities in the banks.

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Team (2)

Chioma's profile
Chioma Ume

Role added on team:

"I am Alimamy Bangura, the program manager of livelihood projects for Cotton tree Foundation and also an expert in VSL scheme methodology. My key role is to conduct training of trainers on VSL methodology and deploy extension staff to the targeted groups for supervision. I will also develop the intended work plan of work breakdown structures (WBS) for implementing the scheme. I will provide an M&E tool for our M&E officer to monitor the activities. I will also be writing reports on the progress."

Alimamy's profile
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Attachments (5)

VSL savings 2.jpg

Saved monies in a group is normally deposited to the bank once it reaches a certain amount which the group will not feel safe to keep in the community. Such monies is deposited to the group's account which will give full access to agricultural soft loans, hence the engagement on commercial production and marketing of harvested food crops. The bank accounts will serve as co-lateral for the group to take loans to settle down immediate farming challenges.

VSL savings.jpg

After training members on the methodology of carrying out a savings and loans scheme, members will immediately start the savings process. There are agreed dates, time and amount to be saved by each member are outlined in the group's constitution. mostly members meet weekly to carry out a savings scheme. In the meetings, members follow the correct procedures. Members attending meeting very late or absent without valid excuse must pay fines to the group. There is group solidarity in VSL scheme.

VSL training 1.jpg

The VSL training is the capacity building of the formed VSL groups. It is nine module training of members on the various methods of conducting the savings and loans scheme. It entails many topics which includes governance structures, constitution formation, group leadership and elections of executives, social fund, credit purchase, credit policies, savings and loans procedures and share-out methodologies. VSL training is 100% participatory as every member is actively involved in all processes.


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Photo of Chioma Ume

Hi Alimamy,

The Amplify team and our experts have some feedback for you and  your team:

For some group members it may be desirable to access larger loans. But for many members, VSLAs are a key alternative to banks and empower them to manage their own funds and keep interest earnings for themselves. Have the VSLA members have asked for these linkages to be built for them? If not, what gives you confidence that they will embrace this idea? How will communities deal with capacity issues, or react to the loss of interest earnings? 

This is an existing approach that has been tried in many contexts, but with limited success. Because many of these groups have only limited capacity, bank loans can often overburden them and result in management issues and possible default. What is unique about your approach that may lead to better outcomes?

Looking forward to learning more!

Photo of Alimamy Bangura

Chioma, thank you so much for the concern. The idea of linking VSL associations of smallholders to financial institutions came directly from the communities we piloted the scheme. The central government of Sierra Leone prioritize access to finance for farmers by establishing community banks at village levels. Larger-scale farmers that have co-laterals have been accessing these facilities whereas small holders cannot meet the basic criteria. our organization being a local NGO initiated the idea of introducing the VSL scheme for these small holders with the ultimate aim of linking them to these facilities. We organized them into groups and ignited the scheme. Though their savings are really minimal but they were able to save good amounts. In a meeting, they suggested of how they can improve on their farming activities. They suggested of adding value to their produce by having processing machines in order to increase the income generation. Since their savings is not enough to buy one, they decided to use their meager savings open bank accounts so that they can access smaller loans. They therefore registered and opened bank accounts with guidance from our field staff. They used their meager savings as co-laterals to seek for loans. Upon receiving the loans, the VSLAs bought the needed machines as outlined in the explanation above to start adding value to their produce and the produce of non VSL members in the communities. The loan is a soft one with very minimal interest of 12% per annum with a grace period of three months. Whilst the processing of their produce is going on, they still continue their weekly meetings of VSL activities. These VSLAs begin to do their repayment from their savings and from the monies paid for processing. The repayment was 100% success to the bank and they ended up owning the machines in the communities making more profits. This initiative has prompted them to do more in collective meetings' decisions in their small villages.

This kind of idea is being admired by other villages in the surrounding and are seeking our intervention in setting up VSL schemes for them so that they can also have linkages to the community banks where soft loans are readily available for farmers at reduced interest rates by the government. Some of these small holders are interested in taking loans to embark on commercial farming activities, others are interested in using the loans to engage in just processing activities and others are interested to embarking on marketing. There are other farmers that are interested in seeking these loans to engage in small and medium enterprises (SMEs) whilst others want to engage in rearing livestock.

It is based on this need by these small holders that prompted Cotton tree Foundation to share such a new initiative of using the VSL scheme to link farmers to the established community banks for agricultural soft loans. Our aim is to target those vulnerable and marginalized small holders in rural communities of our operational areas in northern Sierra Leone. CTF has committed staff that are ready to work with these farmers to improve their livelihood resilience in their localities.

BSc (Hons) Agric Economics
MBA Project Management

Photo of Chioma Ume

Hi Alimamy,

Thanks for the additional information. If I understand you correctly, your idea is to facilitate the ability of existing VSLs to access bank loans? If that is the case, what is preventing these organizations from doing it themselves - a lack of information?


Photo of Alimamy Bangura

Chioma, thanks again for responding. The two existing VSL groups mentioned were the only ones piloted by CTF with small grant from a donor in America called World Servants. The funding was used to setup the two VSLAs, trained them, provided them with the necessary kits to start the scheme in 2014 during the Ebola outbreak. They are mentioned here as examples to show that CTF is not new in implementing this great idea.
They succeeded in accessing the loans from the bank to buy the processing facilities and did the repayment completely. However, the initiative was admired by other communities in the region. other many communities are interested in engaging in VSL activities but CTF cannot support them as we are also constrained. Cotton Tree Foundation is just a local NGO relying 100% on donor funds to support local farmers over the years and because the Foundation has no funding to continue forming the VSL groups, train them, provide them the kits and supervise them, that prompted us to share our initiative with Open IDEO. This is in order for CTF to gain funding from Open IDEO to continue setting up large number of various VSL groups in the region by providing the necessary capacity building and tool kits of the program. Once the 2,500 farmers are organized into VSLAs and provided the necessary materials needed, they will be guided by the Foundation staff to be linked to the community banks to access loans and engage in commercial activites in the region.
The scheme itself has a huge training manual with nine modules that need to be thoroughly explained to these groups through group trainings. Each of the module has various topics to be covered for the groups to be well capacitated. The scheme also has unique materials to be used in carrying out the savings and it even has three different phases they normally undergo through intense supervision from a technical team. All of these cannot be done by themselves thus, preventing them from doing it on their own. The intervention of CTF and its technical staff is a necessity to implement the initiative from the inception to its final stage.

I hope this clears the gap for our intervention.

Thanks, once more for seeking clearer clarification on the matter.

Photo of Chioma Ume

Thanks so much Alimamy! 

Photo of Alimamy Bangura

You are most welcome, Chioma.


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