Photo: Beatrice Hamilandu uses loans from her local Village Savings and Loans Association to purchase parts to support her business making oxcarts for sale. (MCC Photo/Emily Loewen)

If Beatrice Hamilandu lived in the U.S. and couldn’t afford parts for an oxcart she was building to sell, she might go to a bank and take out a loan.

But in her rural community of Mbabala, Zambia, transportation to a bank would be a challenge without a vehicle. And if she made it to the bank, the bankers may not actually loan her the money. Without the loan, she would be forced to stop working on the oxcart until she could save enough money to buy the required parts.

But since 2012, when the community organized three Village Savings and Loans Associations (VSLAs), Hamilandu has easier access to loans to grow her business.

The Compassionate Ministry program of the Brethren in Christ Church in Zambia, a Mennonite Central Committee (MCC) partner, uses field officers to train villagers how to establish and run the VSLAs. MCC SALTers (Serving and Learning Together participants) assist with training and follow up.

Each group has a maximum of 30 members who meet monthly to buy shares, distribute loans and check on outstanding loans. Sometimes they use the profits to fund community projects.

When members need a loan, they approach the group, explain the amount they want and what they plan to do with it; then the collective makes a decision. Members have two months to repay their loans without penalty.

When Hamilandu first heard about the new association, she thought about the unfinished oxcart in her yard and decided to join in hopes of getting a loan to complete the project.

1. She took out a loan for 300 kwacha (about $60) in October 2012.
2. She used the loan to buy parts and complete the oxcart.
3. She sold the oxcart for 2,500 kwacha ($500).
4. She used some of the profits to help pay her children’s school fees. In the past she would have been forced to borrow money from family or friends to keep her kids in school.
5. She repaid the loan and invested some of the profits back into the association.

Hamilandu borrows from the VSLA whenever she can’t afford parts for oxcarts or needs other business capital.

“I like this program so much,” she said in 2013. “It’s an easy way to access loans. Many times I get stuck with my business, so I run to the group to seek assistance.”

MCC continues to support monitoring and follow up of the VSLAs.