Women in rural areas in Gulu and Pader districts who were once forced to live in camps meant for Internally Displaced Persons’ (IDPs) during the peak of the LRA rebels’ led insurgency in northern Uganda, have turned to Village Savings and Loans Associations (VSLAs) or local banks in a bid to ease their financial burden. In Gulu district alone, there are over 2000 VSLAs which are giving out loans to especially, subscribed members, majority are those who operate petty businesses and farming. The loans usually range from 10,000 UGX to 3.000.000 UGX. With loans from commercial banks attracting close to 17 percent interest rate, women find it hard to borrow from banks considering the fact that they lack collateral to surrender.

During a Kabake community dialogue on 27^th January 2019 at Koyo- Lalogi village, Awere Sub County in Pader District, attended by over 200 residents, majority said VSLAs are offering them loans at low interest rates than the ones by commercial banks which in most cases demand for collaterals. Sabina Akoko, noted that, savings with village banks have helped dozens of women put their children in school. “Women can now borrow money and pay school fees for their children and are also able to invest in agricultural production. This in a long run, empower them economically,” notes Akoko.

Another resident, Pamella Atim said the saving with local village bank has enabled her to buy seven bulls. Atim also revealed that as a widow, the loans she borrows has been helping her pay children’s school fees. “Saving village saving and loans association has greatly changed my life. It would have been impossible if it was not because of the loan I borrow from the group which I am a member,” says Atim.

She also noted that borrowing from local banks is not only flexible but also convenient since it does not require a loan security. In some groups, with 35 members, each group can save up to 1.3 M in one saving cycle that usually ends in January of the following year.

Godfrey Oketayot, the Chairperson, Gulu Main Market VSLA, said his members have been able to borrow loans with low interest rates. “For example, if you have saved 500,000 Shillings, you can borrow half of what you have saved and pay back later in case you have problems,” says Oketayot.

The Treasurer of Rwot- Twero VSLA in Pece division, Gulu Municipality, Mary Oluma revealed that they extend financial support for their members to give decent burial for their relatives.

Although majority of the residents who are members of village saving groups are in support of village banks arguing that they are happy that they are no long relying on commercial banks in order to fund their business activities as well as paying school fees, but others do not see any good in village savings.

They expressed concern that village bank charges on interest rate on borrowed loans are too high. Filder Apwoyorwot, a resident of Koyo- Lalogi village, Awere Sub County in Pader District said in some cases, members of village savings loose property that were surrendered as collateral for a borrowed loan. “I have witnessed a member of a village saving losing all her property after failing to pay back borrowed” notes Apwoyorwot.

Patrick Juma Kilama, also said village saving is not a solution to financial problem facing rural women. “Some people have lost cattle and goats after failing to pay back loans. This has left them poorer instead of being empowered,” notes Kilama.

Francis Opiyo- Bangi, the Northern Regional Field Officer Uganda Co-operative Saving & Credit Union (UCSCU) however warned against diverting loans borrowed. Opiyo explained if one borrows money to start up a business that should be the purpose. He also warned Village Savings and Loan Associations (VSLAs) against throwing parties at the end of a saving cycle. Bangi says such parties are unwarranted since it leaves most members poor.

He notes that organizing lavish parties and inviting guests to witness the opening of cash boxes will instead leave the savers poorer since what they have laboured for the whole year will go into buying beer instead of fighting poverty. It has become a common culture among VSLAs members to organize parties where they invite district officials, hire music systems and buy alcohol during the end of a saving cycle.

Kabake Community Radio programme supported by the Konrad-Adenaueur-Stifftung runs a  weekly community debate which is recorded and aired on 102 Mega FM, one of the leading radio stations in Gulu district (northern Uganda) every Sunday between 10AM and 12NOON. Kabake is a Luo (Acholi) word which literally means a search for an answer to a problem or an attempt to find a solution to an issue affecting the community.

Report Compiled by James Owich