Ministry of Finance Field Visit to VSLA Linkage Project Sites in Northern Ghana
The Ministry of Finance Project Coordination Unit Team embarked on a field visit to monitor the VSLA (Village Savings and Loan Association) linkage activities under the Ghana Financial Sector Development Project (GFSDP) in the Northern and Savanah Regions of Ghana. This linkage initiative is being implemented by World Vision Consortium which includes World Vision Ghana, VisionFund Ghana, and World Vision Canada. The consortium is providing a short-term technical assistance to the Ministry of Finance to support linkage of 529 VSLAs in the Northern and Savannah Regions of Ghana.
The Savings Groups’ Information Exchange accounts that there are 34,112 VSLAs in Ghana, comprised of 852, 800 members (an average of 25 members per group), and have approximately US$15 million in savings and US$8 million in outstanding loans. These VSLAs are located mainly in the peri-urban and rural areas and women are the largest participants, comprising 76.4 percent. Though VSLAs provide financial services to the financially excluded in remote areas, they are limited in scope and capacity to deliver a wide range of financial products and services to their members. They can only provide savings, credit and insurance up to the amount contributed by members. It is therefore important to formally link members of the VSLAs to formal financial service providers who are well equipped to provide affordable and appropriate financial products and services to the financially excluded.
World Vision Consortium was therefore engaged by the Ministry of Finance in May 2023 to facilitate development and delivery of financial products that respond to the needs of the VSLA members and enable VSLA members’ access and use appropriate financial products and services in the Northern and Savannah Regions. This innovation contributes to the overall objective of the GFSDP which seeks to promote financial sector soundness in Ghana.
The Ministry of Finance embarked on its first field visit to the project site to monitor progress of the VSLA linkage project implementation in the 2 regions and interacted with VSLAs to assess experiences of VSLA members after linkage, and the impact of linkage on VSLA members' livelihoods and households of groups identified, trained, and linked to VisionFund’s financial products.
By conducting interviews with group members, local leaders, and consortium field staff, the officials gained insights into the members’ previous challenges and improvements after linking up with VisionFund Ghana. Mainly, VSLAs visited reported accessing VFG’s FAST loans and Abusua Asomdwe insurance products.
One of the key objectives of the field visit was to assess the effectiveness of the project's training and capacity building initiatives. The officials were keen to understand how participants had acquired the necessary skills to manage their savings, make informed financial decisions, and establish successful businesses. Additionally, they wanted to evaluate the project's impact on poverty alleviation and gender equality, ensuring that it promoted inclusive economic development.
The visit began on Monday, November 27th, 2023, with a comprehensive briefing at the World Vision office in Savelugu, where the consortium experts presented an overview of the project's execution.
On the second day, the team traveled to Gushiegu and Karaga in the Northern Region and held meetings with members of eight 14 VSLA groups who have been linked under the project. Many individuals from the groups expressed gratitude to the Ministry of Finance and the World Vision Consortium partners for providing them with access to loans that supported their activities. It was particularly striking to note that access to micro credit had empowered women, extricating them from the exploitative hands of middlemen who provided farm preparation services during peak farming seasons in return for farm produce during harvest. As aptly expressed by Gladys Torusong, tractor service providers charge them 400 Ghana cedis for a bag of soya beans. However, with the support of VisionFund, they have now gained the ability to carry out their own farming activities.
The warm reception continued as the team visited two additional groups. Both community members and leaders greeted visitors with enthusiasm. The Chief of Karaga extended his gratitude to the visitors for undertaking such a transformative project.
The next day, the team traveled to the Kperi and Nabori communities in the Savanah Region. In Kperi, Madam Awinbila Akuntubuno shared her experience with the project, saying, "We used to travel long distances just to sell firewood, but now through VisionFund, we have the opportunity to engage in farming activities and other businesses as well, even after the farming season ends." The introduction of the project has greatly benefited the community, enabling them to access funding for farming activities and other businesses. The group members emphasized the significance of financial literacy training in managing funds effectively and ensuring timely loan repayments.
Despite the notable accomplishments, the clients identified several significant challenges that required the attention of the visiting team. These concerns included the lack of sufficient educational infrastructure, the absence of shea butter processing machines, and the absence of electricity. The commitment of the Ministry of Finance, World Vision, and VisionFund to promoting sustainable development through enhanced access of vulnerable families to financial services was evident despite these challenges.
This trip was a truly enlightening experience for the Ministry of Finance, as it provided them with a unique opportunity to witness firsthand the impact of their funding on the lives of women and children in remote communities. The visit allowed the ministry to gain a deeper understanding of the positive changes that the funding has made, and the impact it has had on the overall well-being of the community.