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mothers2mothers microfinance project supports Ugandan women

Mentor Mother opens village convenience store that serves as community hub.

Mentor Mothers in Uganda review finances for their Village Savings and Loan Association (VSLA).

A group of Ugandan women are literally cashing in on an innovative project launched by mothers2mothers (m2m) in 2018 in partnership with Cartier Philanthropy. The Village Savings and Loans Association (VSLA) is a microfinance club that offers its members—Mentor Mothers and their clients—a sustainable financial solution in geographical areas without easy access to formal banking services.

According to the World Bank, more than 65% of Uganda’s adult population are unable to access formal financial institutions for credit, only 16% deposit their savings at a formal banking institution, and 60% keep their savings at home and in the form of assets such as livestock.

Similar to a stokvel in South Africa or chama in Kenya, a VSLA club serves as a rotating credit facility in which members contribute fixed sums of money to a central fund on a weekly, fortnightly, or monthly basis. Loans are then distributed to all members on a rotating basis.

Mentor Mother Teddy Atim (right) with two other members of her VSLA.

For 25-year-old Mentor Mother and m2m Spokeswoman Teddy Atim, joining the VLSA gave her new opportunities to provide a better future for her family. The mother of three applied for a microfinance loan to open a home-based informal convenience shop business .

“I am extremely grateful for my m2m salary, but I had bigger dreams for myself and my family, so I applied for a loan to open this small business,” she says.

Teddy’s shop stocks essential items such as salt, cooking oil, and soap. It also doubles as a community hub, especially for her m2m clients who need guidance and support during weekends when she is not visiting local health facilities.

“My shop has become a safe place for women to meet and discuss their challenges. As a Mentor Mother, I use this space to offer client support and share important health information with the broader community.”

Through the VSLA, Teddy has been able to better save and pay expenses such as her children’s school fees. “The loan approval process is easy and repayments can be made after three months at low interest rates.”

To start, 81 Mentor Mothers were trained and 126 members enrolled in the VLSA from seven m2m-supported health facilities. The Mentor Mothers and other members completed comprehensive training covering small business management, and how to save and access credit. By the end of the first year, the VLSA saved a total of US$6,300 and lent $5,600 to 79 members, including Teddy.

VLSA addresses marginalisation

Despite a drop in the proportion of Ugandans living below the national poverty line from 31.1% in 2006 to 19.7% in 2013, and the share of the population living on $1.90 per day or less declining from 53.2% to 34.6% during that same timeframe, Ugandan women remain disproportionately marginalised and face discrimination in their country. Deep-rooted cultural and customary practices—such as polygamy—impact a woman’s access to inheritance, land, finances, and property.

To help address this societal marginalisation, Ugandan Mentor Mothers will introduce the VLSA programme to other local communities to help more women better establish financial stability for themselves and their families—another example of m2m innovation that supports our vision of delivering health, hope, and an HIV-free generation.

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