GOOD PRACTICE - Youth Savings culture and entrepreneurial acumen. AJPRODHO JIJUKIRWA - Rwanda

Good Practice – Youth Savings culture and entrepreneurial acumen

Brief summary:

VSLA methodology has valuable services for the youth in the formal sector. Within their groups where they practice a culture of savings through practical trainings of financial literacy, saving with a goal, enterprise development, training of life skills and conflict management, etc. they have instilled a culture of savings, innovative ideas to unlock business opportunities, self esteem and decision making, access to the information that benefit youth and aspirations of business formalization.

Access to finance is often costly and difficult for poor people and low/income earners due to lack of collateral securities which are a pre-requisite in low developing countries.  VSLA have proved to be the sources of access to finance either internally and or externally to MFI’s / Banks for the youth in the informal sector. VSLA have different products including savings, loan interest rates, fines and social funds. Savings are done on a weekly basis where every group member purchases the shares based on ability. At present, the saving share is between 300-1000 francs and members have purchased more than one share per week. This has enabled youth to transact within their groups at a manageable cost and at a low risk rate.  VSLA have enabled the regular flow of income and investment in more dynamic income generating businesses.

Key Areas of Good Practice:

• Development of Supportive Legal and Policy Frameworks (3.1.3 – 3.1.4)
• Advocacy Methods (3.1.2)
• Institution and capacity strengthening of implementing agency, project partners including (local) government agencies (3.1.9)
• Awareness raising among informal economy operators/workers and other stakeholders (3.4.3)
• Organising informal economy workers into associations, cooperatives or other officially registered groups (3.1.9)
• Community based savings and credit schemes (3.3.5)
• Providing support to informal economy operators/workers to access services (social protection services, business registration, access to formal savings and credit schemes, training, etc.) (3.3.1)
• Entrepreneurship and business management training (3.3.2)
• Leadership training, empowerment training  (3.3.4)
• Vocational and/or skills training (3.3.6)
• Knowledge of rights, laws and regulations (3.3.1)
• Support to improve Occupational Safety and Health among informal economy workers (3.2.3)
• Community-based social protection (3.4.4)
• Enabling especially vulnerable groups on economic empowerment (women, people with disabilities, affected by HIV, youth, refugees, mi grants, minority groups, etc.) (3.4.6 – 3.4.7 – 3.4.8 – 3.4.9 – 3.4.11)