Defending Dignity. Fighting Poverty.



Background: Throughout this long period, CARE has been reinforcing the Village Savings and Loans (VS&L) methodologies and CARE has developed a strong reputation in Mozambique (and beyond) for its quality work in increasing living conditions amongst poor rural communities with improved access to savings and loans.

History: In late 1993 CARE started micro enterprise development activities in the Manica Province and Beira corridor in Mozambique. Funded by the Austrian government, CARE launched Savings and Credit for Entrepreneurs (SCM). This was complemented by EU, DFID, Austrian funding for the Crédito Sustentável para o Crescimento de Empreesários (CRESCE) program in Zambezia. In CARE transformed CRESCE into the Banco Oportunidade de Mozambique (BOM), in a partnership with Opportunity International (OI), bringing more microfinance possibilities to poor Mozambicans. CARE is still a minor shareholder in BOM and member of the Board.

Through the 90s, CARE Mozambique continued with Saving Group programs in Inhambane and Nampula, using the MMD3 methodology piloted by CARE in Niger, but changed the name to PCR (Poupança e Credito Rotativo, Rotating Savings and Credit). Nowadays, PCR is often used in Mozambique as a generic term for Savings Groups (as also ASCAs). The example of turning a CARE project into an NGO in Nampula which was the start of Ophavela was followed in Inhambane with the creation of the local NGO Kukula.

Current Programs: Since CARE introduced the VSLA methodology in Mozambique it has implemented several programs4 using direct implementation and group-paid Village Agents, programs in cooperation with local NGO's (Ophavela and Kukula). The Banking on Change program was part of a CARE / Plan International’s initiative in 8 countries, funded by the Barclays Bank. This was CARE Mozambique's largest SG program reaching more than 19,000 members. By 2015, CARE Mozambique has contributed to the creation of over 5,000 VSL groups gathering over 93.000 people, of whom 75% are women, since it started SG's in the country.

Today CARE continues to plays a role in technical assistance and capacity building in community based microfinance, as well as networking for microfinance linkages and advocacy. At the same time our local partners such as Ophavela (in Nampula province) and Kukula (in Inhambane province) organize the groups, provide training and information. 

At present CARE is implementing a pilot project, which aims to test and implement innovative approaches to Saving Group (SG) formation. By re-engineering the current SG methodologies in use by Ophavela with the objective to better meet its members’ needs while increasing consistency of group quality and group sustainability. Moreover, the current fee for service system and the set up of an agent (animator) association will be improved to ensure for sustainable SG formation and access to SG services by members. These innovations, when successfully piloted, will improve Ophavela's overall performance in the Nampula province and have an impact on the Mozambican SG industry since Ophavela is considered an industry leader in Mozambique, and has trained other SG promotion agencies.

Evaluations of many of our programmes in Mozambique demonstrate that participating household asset increase and enhance household protection from shocks; improve and consume a wider variety of food; have easier and more regular access to health and education services and increase their levels of social capital and participation. Perhaps most striking of all is that VS&L is immediately sustainable in remote rural areas where other micro finance services are not sustainable. 

3 Mata Masu Dubara (MMD) meaning 'women on the move'.

4 For Example: SEED project 2008-2012, Banking on Change 2009-2012, PROSAN 2013-2017



The VSL approach offers group members access to the following products:

Savings: Members of VSL groups make regular savings and receive a return on their investment at the end of the group cycle that ranges between 30% and 100%. Members are able to save on a flexible schedule and in whatever amount they wish, since these terms are agreed within the group.

Loans: Members are able to borrow with minimal administration, as only peer approval is required for loans. Loans are typically $10 to $20, a level which is too small for MFIs to administer cost-effectively. The group sets the interest rates for borrowing, typically around 10% per month. All profits from the interest paid stay within the group.

Insurance: Groups can choose to set up an insurance fund, often known as a Social Fund, which members contribute to regularly and from which they can draw in emergencies. These offer interest-free or low interest loans with flexible repayment.


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