Digitalizing Savings Groups in Sierra Leone
Ever wondered how small savings groups transform the lives of marginalized communities?
In Sierra Leone, small savings groups have a long history of supporting farmers and marginalized communities, especially women. These groups help their members have increased access to and control over their resources.
CARE’s engagement with Village Savings & Loan Associations (VSLAs) is one such approach with a particular emphasis on supporting women's economic growth of women in rural communities.
Despite VSLAs' ability to financially empower communities, these associations are often situated in isolated areas and experience several challenges
Partnership to support digital literacy
To tackle these challenges, CARE Sierra Leone collaborated with MikashBoks, a global adaptable digital platform. Their user-friendly software helps in connecting users to mainstream banking services. Through this partnership CARE intended to:
- Enhance the efficiency of financial management of VSLA processes;
- Introduce secure transactions for savings groups;
- Accelerate the adoption of digital financial practices in rural areas; and
Support the transition from cash to digital wallets.
Difference between digital and manual data collection
| VSLA Data Collection | Manual Data Collection | Digital Data Collection |
| Handling of Finances | Relied on manual handling, which often involves physically counting and managing cash, leading to potential errors and inefficiencies. | Automated handling, where financial transactions are recorded and managed electronically, reduced human error and streamlining processes. |
| Record-Keeping | Inaccuracies in record-keeping due to manual entry, leading to errors, lost records, and difficulty in tracking financial history. | Accurate automated record-keeping that ensures precise and consistent records, easily accessible for review and audit. |
| Management of Loans | Mismanagement of loan calculations due to manual processes, resulting in errors in interest calculations, repayment schedules, and loan tracking. | Efficient management of loans with automated calculations, clear repayment schedules, and real-time tracking of loan status. |
| Risk of Theft | Higher risk of theft due to cash in hand management, making funds vulnerable to loss or theft by individuals handling the cash. | Lower risk because digital wallets with transactional history are tracked more efficiently, providing secure and traceable handling of funds. |
| Concentration of Records | The records of the group's financial history are usually concentrated in the hands of a few individuals who are more literate, creating dependency and risk if these individuals leave or lose records. | Distributed access to record keeping through transparent record sharing to all members of the group, ensuring collective ownership and reducing dependency on a few individuals. |
| Accessibility for Literate Individuals | Limited to literate individuals who can read and write, excluding non-literate members from fully participating in financial management. | Accessible to all members, including those who are not literate, through user-friendly interfaces and possibly visual or audio aids, fostering inclusivity and participation. |
Bridging the digital divide
During the pilot phase of MiKashBoks, CARE provided SIM cards and smartphones to VSLA members and village agents for safer financial transactions. The app could be used both on smartphones and feature phones which enabled easy access for women. CARE also initiated digital literacy training. Despite challenges such as low literacy and poor connectivity, the app ensured adoption in 81 VSLA groups participated in the pilot and CARE has plans to expand to 200 VSLA groups. This was done through the user-friendly design of the app and the design of the app to function both online and offline so that data collected can be safely stored.
The impact of this app on diverse user groups was significant.
- For rural women, it provided a gateway to financial independence. The mobile feature enhanced safety and convenience.
- In urban areas, the app enabled women to access practical business advice on-the-go while carrying household and childcare responsibilities and striving for financial independence.
- For young and ambitious urban entrepreneurs, the app acted as a platform for social change. CARE and MiKashBoks worked to alter stigmas around women’s use of technology.
Overall, MiKashBoks’ implementation saw a notable transition from traditional cash transactions to a more secure, smartphone-based financial management. The application also catalyzed a shift towards greater autonomy and self-governance in financial management. The VSLA members began to embrace a new digital financial independence. MiKashBoks also made record-keeping and financial management for VSLA groups transparent, efficient and safe.
The program worked closely with partners like MiKashBoks, using technical data and feedback from users to improve the digital tool and adapt strategies to local needs. This ensures that digital transition is inclusive, user-friendly, and sustainable. As a result, VSLA members, especially women, have gained better digital skills and financial independence, helping their communities grow.
An inclusive digital future
Sierra Leone’s journey towards an inclusive and digital VSLA, despite its challenges, is promising. While communities may face challenges such as limited literacy, connectivity and reluctance to use technology, the pilot has shown significant achievements.
Traditional VSLA groups have transformed into a digital framework and CARE’s efforts to enhance financial autonomy of women and girls continues, driving community development and empowerment through digital tools. With 81 VSLA groups already transitioned to digital operations and plans to expand to 200, CARE Sierra Leone and MiKashBoks are set to make an even greater impact. Continuous training and support remain crucial to ensure no member is left behind in this digital transformation, paving the way for a future where digital financial tools act as catalysts for community and individual empowerment.
Case Story: SALLAY
Sallay Mummy Sesay is a secretary from the Bansarati VSLA who utilized the app’s features to expand her gari (cassava flour) production business. This is a great example of how beyond managing transactions, the application offered networking and business growth opportunities. She gained access to a loan from a local microfinance institution based on the detailed savings history they easily provided through the app’s digital ledger. However, maximizing these benefits required proactive exploration and utilization of the app’s networking and educational capabilities, a natural evolution of users’ enhanced digital literacy.