“My old shop was a stress shop”.
That is how Nuro Adan Ali, 33-year-old mother of eight children, felt about her shop in Somalia. She says, “It was a stress shop because I never made any profit. When I started, I borrowed $150 from my friends to build the shop. Every month I counted losses because customers came and took things for credit and I did not write them down anywhere”.
As the months went by, her losses increased. She didn’t know how to repay the money she had borrowed from her friends. She says, “It was difficult to do anything, and I felt demoralised”.
Then Nuro met Muhidin Ali, chair of the local community education committee, who told her about the village savings and loan association (VSLA) supported by the Somali Girls’ Education Promotion Project (SOMGEP) project. The project provides financial and business training and supports women to set up their own VSLA groups.
The SOMGEP project, funded by UK Aid through the Girls’ Education Challenge (GEC), and with additional support from the players of the People’s Postcode Lottery, works with schools, communities, religious leaders and the ministry of education in Somaliland, Puntland and Galmudug, and aims to increase marginalised girls’ access to quality post-primary education opportunities; improve learning outcomes; and enhance economic sustainability.
So how does a VSLA help girls to go to school, and stay there?
Many families – and particularly female-headed households – do not have a reliable source of income. Mothers in the Sool region told project staff that before the project intervention, they faced a lot of challenges: they could not afford basic necessities and their children often missed school because they could not provide basic requirements, such as uniforms.
One mother said that her daughter was often mocked by other children because she used to wear dirty uniform. This touched her as she was unable to provide a decent uniform because of a lack of income and no safety net, as her close relatives were also struggling with the impact of the drought on their livestock – the main source of livelihood for most families – and could not help her out.
That’s where the VSLA groups can help. As Nuro explains, “I learned a lot from the classes. We came together as 20 women and formed a group to save and take loans to improve our lives”.
"I learned a lot from the classes. We came together as 20 women and formed a group to save and take loans to improve our lives."
The VSLA groups use their pooled savings to provide a safety net for group members if they need short-term support to meet basic needs. As a member of another VSLA, the Alla-Aamin group in the Sool region, explains, “Now our group members are very connected. We are fully aware about the situations that each mother is facing and we even help some members through are social fund”.
Another group member says, “After joining this group, I got a quick place that I can borrow money and pay it back in instalments. Since the establishment of the group, I took a loan…to pay the secondary school fees for my older daughter, and I used the remaining amount to cover our basic needs”.
VSLA members can also request loans to help them set up income-generating activities or improve their small businesses. Nuro took a loan of $220 from her group, the Kobac iyo Keyd group, and drawing on the financial and business training provided by the project, she was able to expand her small shop – which sells everyday foods like sugar, rice, wheat, as well as other items such as clothes – and plan for and manage her loan repayments. Nuro is now the chairperson of her group, and says. “Having capital that we can easily access will enable our members to expand their business and enables us to support our families, particularly the well-being of our children”.
What was previously her “stress shop” is now thriving and Nuro sees greater opportunities ahead. Her renewed optimism for the future is echoed by another mother and member of the Alla-Aamin group, who sums it up neatly, “Since I joined the VSLA, my life has changed. Now I own a small corner shop which I started with the money I borrowed from the group savings. The income from the shop is still small but it has become a promising source of income. With time I hope my shop will become a big store”.