The Power of Village Savings and Loan Associations

In Ethiopia’s East Hararghe Zone, the community has long faced the harsh consequences of prolonged drought, conflict, and deeply rooted harmful traditional practices. For Zahra, a resilient woman living with a physical disability, these challenges have always been more than distant headlines, they shape her daily reality. 

Living with a disability and facing economic hardship, Zahra once feared that her future would remain unchanged. But her story, like many others in her community, took a hopeful turn through an initiative that blended financial inclusion and social support.  

Desperate for change, Zahra joined the Biftu Beri Roba Village Savings and Loan Association (VSLA), an association supported by SOS Children’s Villages in Ethiopia through the Ethiopia Joint Response Project. The project’s key intervention in livelihood assistance provided the tools and training the association needed to function at its best. 

At its inception, the VSLA consisted of members struggling with limited resources. But with support that included VSLA starter kits, stationary materials, and seed funding, the association became a functional and empowering space. Members began contributing weekly: 50 ETB to a savings fund, 5 ETB to a social fund, and additional contributions for fines. These modest deposits have grown into something substantial, 48,000 ETB in savings and over 9,600 ETB in the social fund establishing not only economic stability but also a shared safety net. 

Community strength in the face of adversity 

Despite her early enthusiasm, Zahra’s personal financial challenges soon made it difficult for her to keep up with regular contributions. Feeling discouraged, she considered leaving the group. But when she shared her intent with fellow members who had become like family their response was unexpected and deeply touching. 

Refusing to let her walk away, the group decided to cover Zahra’s contributions among themselves until she could return independently. This act of collective kindness kept Zahra connected to the group as she stayed in the association with a renewed sense of hope and belonging. 

The VSLA had become more than a financial mechanism, it had grown into a genuine community. Its original purpose of fostering economic resilience had blossomed into a deeply personal support network where members uplift each other in every sense. 

A new beginning 

Today, Zahra is back to contributing joyfully. Like many members, she now runs a small business, buying and reselling goats, raising livestock, and selling eggs. With loans drawn from the group’s revolving fund, members are growing their enterprises and repaying with a heartfelt “Galattomaa,” meaning "thank you" in Afaan Oromo. This expression captures the gratitude and respect that now define the group’s interactions. 

The resulting financial independence has improved lives. Women like Zahra can now afford to meet their households' needs, send their children to school, and perhaps most importantly face the future with hope. 

The VSLA’s social fund has proven vital in times of emergency, and its success has rippled outward. In 2024, the Ethiopia Joint Response Project helped establish and support five VSLAs, engaging 100 active members. In 2025, another 75 participants were able to access savings and credit, empowering them to create sustainable livelihoods and build a culture of saving, mutual support, and resilience. 

*To respect the person's privacy, their real name has not been used.