Unlocking opportunities amid economic crisis: Strengthening the role of Village Savings and Loan Associations (VSLA) in Yemen

With the proper training and financial management mechanism, a box, three locks, and basic stationery could improve Fatima’s life.

Fatima is a 38-year-old mother of four children from Al Massad, Al-Maqatrah District, Lahj. Before joining the VSLA group in her area, Fatima faced difficulties supporting her family as a stay-at-home mother. Despite her strong desire to open a small ice cream business, she lacked the funds to purchase the necessary materials for her business.

“I had a small amount of cash, but it wasn’t enough to fund the ice cream business,” says Fatima. “I needed to buy some tools, such as a refrigerator and raw materials. The saving group allowed me to save the small amount of money I had and I was able to benefit from the pool fund to take a loan and start my business. I also benefited from the training of setting up and managing a business.”

After acquiring the needed skills and money through the VSLA group, Fatima opened a store selling ice cream, groceries, and other essentials. As her business thrives, she can now support her family, repay the loan, and continue saving.

“Thanks to the VSLA, my life has improved in numerous ways. I can now provide for my family while contributing to the growth of other women in my community through savings. I’m genuinely grateful for the support of the VSLA,” she says.

In 2022, CARE supported a group of 18 small-scale farmers in Tuban District of Lahj Governorate to form a VSLA group and save the money they earned from CARE’s Cash-for-Work projects in their area.

“After six months of saving, we agreed to use our savings to rent farmland and cultivate it,” says Ali, a 48-year-old father of six children. “We planted different crops, including okra, corn, and tomatoes. It was a great season, and we sold our crops in the market. Part of the revenue was used to pay off the loan, and we invested the rest of the money in renting more farmland to increase our production.”

The success of the farmers’ VSLA group has significantly enhanced its members’ quality of life. They can now support their families and save money for the future. It also inspired other farmers in the region to cultivate their abandoned lands.

“Before the life skills training, we were aiming to save money to spend on buying food and new clothes for our families,” says Ali. “The training sensitized us to the importance of investing our savings to generate sustainable income for our families. It also alerted us that we can do this jointly for a greater impact,” he concludes.

Displaced Families Access Finance to Rebuild Their Lives

Afaf and her family were displaced to Al-Maqatra district in Lahj Governorate years ago, yet they could never find suitable jobs to provide for their young ones’ education and healthcare.

Luckily for Afaf and her brother, they participated in CARE’s VSLA and life skills training and joined one of the saving groups in their area.

“With the help of the VSLA group, my brother and I were able to obtain loans and launch our wedding planning and dress rental business,” says Afaf.

“I work in the boutique with my brother and have trained my sister to do brides’ hair so we can provide full service for our clients all in one place. Our hard work is starting to pay off, and as a result, we’ve been able to cover the school fees for two high school students in my family. It’s such a relief for our family.”

Afaf’s business is one of its kind in the area. Another CARE-supported project rehabilitated the unpaved road to Afaf’s village, linking it to neighboring regions and increasing the number of customers that can reach her business.

“Thanks to CARE’s project that paved the road, we have seen a rise in our clientele and demand for our services. We are now planning to establish the first wedding hall in the area,” concludes Afaf.