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Micro-Loans in rural Uganda

Community banks give opportunity to locals

Photo of April Parsons
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I was torn between writing this up under research or waiting until the ideas phase because it has been a couple of years since I saw this, and I don't want to give the wrong facts, but I think it could be very valuable to the topic of financial empowerment. 

A community I visited while I was in Eastern Uganda had started a local "banking" system in their town. It started with a lock box, that had three keys on it. Each of the keys were held by a different elder in the community and all three had to be present to open the box. Members of the community could deposit money into the box and when they needed a loan they would go to the elders and explain what the money was needed for. I don't remember the exact figured they used; they could either get up to three times what they previously put in, or could get up to a third of what was in the lock box at the time.

The person I spoke to about the box said it was really helping people with not only saving money, but understanding the importance of saving money as well. And, since it was a community wide contribution, people felt more financially safe knowing there was somewhere they could go if they needed a little extra help. 


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Photo of Koh Lim

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Photo of April Parsons

Now that I've done some more research around the OpenIdeo site I've realized that this has expanded way past my idea!! First, the concept I was talking about is called (at least by one organization, I'm sure there's more) the Village Saving and Loan Associations.

Second, I saw a different contributor who essentially saw this model used toward a common communal purpose (in his case, mattresses).

And third, there was another contributor who saw this model used to empower commercial sex workers in Mbyua.

Photo of Shane Zhao

Great share April, and we're glad to see that you've been exploring all the inspirations on the platform! Here is one more likeminded post that you'd be interested to check out:

Photo of April Parsons

Thank you Shane! I will definitely check them out!