In Module 3, we discussed the differences between men’s and women’s access to finance, which leads to different ability to undertake CSA interventions. As mentioned there, it is important to look into both formal and informal financing models when designing CSA interventions.
A group of 33 women in Awa’s village who all herd goats have been discussing forming a cooperative and creating a refrigerated storage facility for goat milk, allowing them to increase the shelf life of their milk and generate extra income. However, many of the women are nervous about joining and financing this cooperative, as they are responsible for several household costs, including supplemental food purchases, weddings, health care of family members and their children’s education fees. Most of these obligations require quick and easy access to funds, and it is important to the women to have cash on hand as these needs arise.
Awa and the other women decided to organize using a village savings and loans association (VSLA) model to generate funds for the storage facility. They determine the amount of money they need to raise to purchase the premises and materials for the storage facility and a minimum payment from each of the 33 members that would let them raise those funds in one year. Even though they know it will be hard to lose the flexibility of having those funds, with the VSLA model the women are all confident they will have access to enough money to fulfill their household obligations. They explain the process to their husbands and other family members, who agree to help support costs for the first month if necessary, as the VSLA is building funds for the first loans. The women elect a president, secretary, treasurer and two controllers (who manage the money), get a cash box with three keys (to be held by the president, secretary and one of the controllers) and begin making deposits. As needs arise, they begin to take out loans, paying back a little extra as they return the loans. After a year, the women have not only raised they money for the refrigeration storage space, but also have extra earnings from loan repayments. They decide to save these earnings as a basis to continue the VSLA and determine that they will discuss what the next major purchase for the cooperative will be in three months.
Three months later, the women in the cooperative decided to use the second pay out of savings from their VSLA to purchase a truck and hire a driver who would take milk and several of the women to a nearby city a few times a week so that they could sell their milk. Rather than each trying to negotiate on their own, the women have decided to bargain collectively to sell all their milk at a consistent price. This also allows them to more easily pool their milk supplies and redistribute earnings based on each person’s milk contributions to the cooperative. Since together they have a large supply of milk to sell, they have been able to negotiate above market rates for their sales!
While this is not a CSA intervention in the strictest sense of the term, the additional finances that women in this case study generated allows them greater flexibility to participate in CSA programs.
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