In most hard-to-reach communities in southeast Nigeria, rural women face multifaceted challenges that perpetuate the cycle of poverty. Limited access to financial resources, inadequate education, and cultural constraints often hinder their ability to achieve economic independence.
However, a transformative solution has emerged in the form of Village Savings and Loans Associations (VSLA groups, which stand to significantly close the poverty gap for these women.
By fostering financial inclusion, empowerment, and community solidarity, VSLA has the potential to uplift rural women and, by extension, their families and communities. Women who participate in VSLA often report a significant improvement in their household income.
This supplementary income allows them to contribute more towards household expenses, ensuring that their children have access to education and nutrition. Moreover, as women gain financial independence, their confidence and decision-making authority within the household increase, which challenges traditional gender roles and fosters a more equitable environment.
Ibo women in some hard-to-reach communities with no banks or other financial institutions in their resilient nature, Village Savings and Loans Association came on to bank the unbanked. This system has worked well in the economic self-enhancement of rural women.
One of the most immediate benefits of VSLA is increased financial inclusion for rural women. Many women in rural areas lack access to formal credit facilities due to systemic barriers, such as lack of collateral or knowledge of financial systems. VSLA breaks down these barriers by providing a safe space for women to save and access credit on their terms.
With new financial resources, they can invest in small businesses—such as agricultural activities, handicrafts, or small retail operations—which can lead to increased income generation. VSLA are not just financial institutions; they also serve as support networks that promote community solidarity.
The act of saving together fosters trust and strengthens social ties among members. Women share not only financial challenges but also life experiences, advice, and emotional support. This creates a sense of belonging and collective responsibility, which is especially vital in rural areas where social isolation can be pronounced.
The ripple effects of these changes extend beyond individual households, contributing to broader community development. As women become economically empowered, they invest in their children’s education, healthcare, and nutrition, breaking the cycle of poverty for future generations.
Village Savings and Loans Associations are emerging as a crucial strategy in the fight against poverty, particularly for rural women. By promoting financial inclusion, economic empowerment, and community solidarity, VSLA provides a sustainable pathway for women to lift themselves and their families out of poverty.
As more women gain access to financial resources and education, the potential to close the poverty gap becomes increasingly attainable. Thus, supporting the establishment and growth of VSL groups should be a priority for policymakers, NGOs, and communities aiming to achieve lasting social and economic change in rural areas.
As women all around the globe gather at the United Nations for CSW 69 to evaluate +30 Beijing, Our attention should also be drawn to Women and Finance, which is among the 12 platforms of the declaration and tries to institutionalize VSLA as truly embodies a panacea for rural women grappling with the realities of poverty.
Ngozi Lucy Ajuruchukwu is a Program Officer in Gender Responsive Action and Equity Development
