SOURCE: Village Enterprise

Village Enterprise

September 07, 2011 15:50 ET

Village Enterprise Creates Savings Groups

Sustainable Strategy Boosts Savings and Access to Credit

SAN CARLOS, CA--(Marketwire - Sep 7, 2011) - Village Enterprise, a leader in rural microenterprise development, is rolling out a new program of Business Savings Groups in East Africa.

The new program, researched and piloted last year with funding from Project Redwood and financed in part this year by the West Foundation, supports poverty alleviation and livelihood development. Village Enterprise provides resources to start small businesses in rural East Africa. Providing financial education, and now sustainable Business Savings Groups, are a key part of this mission.

Savings a Critical Buffer
Dianne Calvi, CEO of Village Enterprise, notes, "This is a natural and exciting extension of our strategy. Savings have shown to be an incredibly important part of surmounting extreme poverty -- savings provide a critical buffer when there are droughts, illnesses, family emergencies, or schools fees to pay." When they join the program, many people are making less than $1.25 a day -- but that is an average, and income can vary dramatically, especially for small farmers. As for the local groups providing small loans to each other, "Since the program is self-directed and managed, it is a great, local source of credit for people living in very rural locations," Calvi explains. Financial education is an important and growing part of the training Village Enterprise gives its small business owners as they start their businesses. The entrepreneurs receive business and financial education training in groups of about 30. It is these groups that provide a structure for the Business Savings Groups. Groups create their own constitutions, elect leadership among their members, and manage the process themselves, with initial guidance from Village Enterprise. Greater savings and access to such credit can translate into higher income, better nutrition, and more children enrolled in schools.

About Village Enterprise
Headquartered in California, Village Enterprise works in East Africa, in Kenya and Uganda. Village Enterprise's multi‐pronged economic development model is unusual in the microenterprise development field. The organization creates start‐up businesses in rural areas. Village Enterprise selects local village leaders (Village Business Mentors) to provide mentoring during the first year of the new business, and to create Business Savings Groups which provide opportunity for group-run savings and credit. Village Enterprise provides formal training on topics such as savings, profits, record-keeping and group cooperation. Grants of $150 (or non-cash assets to start a business) are given to business groups of 3 people. This small sum, which does not have to be repaid, has been proven over 23 years to have a significant impact in East Africa. For more information, visit www.villageenterprise.org or e‐mail info@villageenterprise.org.

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