Policy Brief: Village Savings and Loans Association

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The demand for financial services is high in rural areas in Nigeria. Formal financing, the main strategy led by the Central Bank of Nigeria and other bodies, is often not suitable for the informal sector. As a result, rural communities remain unserved by existing schemes such as cooperative finance and microfinance, which face shortages of funds, and quality and accessibility issues.


In contrast, Village Savings and Loan Associations (VSLAs) have demonstrated good progress in providing financial services to poor rural women and men engaged in farming, trading, enterprise and other income-generating activities. Because of its capacity to bridge the gap between formal and informal financing for businesses and enterprises, the government should support the initiative. This would improve the quality of life in communities, increasing agricultural production and economic opportunities to a significant extent. It would also complement government strategy to deepen financial inclusion country-wide.

Supporting existing VSLAs, forming new ones and building their capacity would be the immediate steps towards  these goals.