Empowering Rural communities through Partnerships: The Impact of the Ghana Financial Sector Development Project.

Access to financial services varies widely across different regions and among various groups of people in Ghana. In 2023, approximately 2.99 million people in Ghana lived in extreme poverty, with the majority residing in rural areas. Among these, around 2.8 million people in rural regions and 214,000 in urban areas struggled to live on less than $1.90 a day. Women in these regions are disproportionately affected, with almost half (48.2%) experiencing multidimensional poverty, lacking essentials in health, education, and living standards (Statista).

To address this issue, the Ministry of Finance Ghana partnered with the World Vision Consortium, comprising World Vision Ghana, World Vision Canada, and VisionFund Ghana, to provide short-term technical assistance. This initiative aimed to connect Village Savings and Loan Associations (VSLAs) in the Northern and Savannah Regions to  Financial Service Providers (FSPs). The consortium was tasked with guiding these VSLAs in interacting with FSPs, granting them access to a range of financial products and services.

The goal of this partnership project was to ensure that vulnerable women and the poor, who form the majority of VSLA members, could access financial products that can help them start and grow businesses, improve farming activities, and empower their communities financially.

VSLAs in the Northern and Savannah Regions face significant challenges. They often lack training in record keeping and financial planning, leading to inefficiencies. Weak internal governance undermines member confidence, while limited connections with formal financial institutions restrict access to a wider range of financial products like loans, savings, etc. Additionally, storing savings in a box, though protective against internal theft, risks theft by outsiders and prevents members from benefiting from formal financial institutions' advantages like interest earnings and enhanced security.

The objectives of this partnership project were, to provide educational training for VSLAs to help them properly manage their finances, to link VSLAs to FSPs to facilitate access to a range of financial products and services, and to support VSLAs in their interactions with these providers to ensure smooth and beneficial partnerships.

This strategically planned partnership project came to life, leaving an undeniably positive and lasting impact on the communities involved.

The project achieved significant results. This includes connecting over 530 VSLAs to FSPs, benefiting around 15,000 women and 4,000 men in the Northern and Savannah Regions. It established partnerships with five FSPs: Tizaah Rural Bank, Kintampo Rural Bank, Bonzali Rural Bank, Bole Community Rural Bank, and VisionFund Ghana. Additionally, the project provided training in effective financial management to 19,000 beneficiaries, significantly enhancing the financial inclusion, community empowerment, and poverty reduction efforts in these regions.

 Not only did beneficiaries see financial improvements, but the entire community thrived. Here are some inspiring stories shared by beneficiaries during field monitoring in the communities.

Gladys Torusong from the Karaga community  “The project saved us from exploitation by middlemen during peak farming seasons. Previously, tractor service providers charged us one bag of soybeans for every four bags. With the project's support, we can now carry out our farming activities independently by paying for the service of tractors when we need them, with the support of FSPs.”.

Awinbila from the Kperi community, “Our only means of survival was cutting and selling firewood to support our children during the off-season. Thanks to this project, we can now care for our children with savings from the savings box, as we were educated on managing our monies effectively. We are also able to manage decent small businesses during the off-season with support from the FSPs”.

Zainab, the savings box keeper for the Salaa group in the Salaa community recounted, “A fire outbreak in my house brought so much misery to me when I had to worry about the savings box and the safety of my children. With the introduction of the community bank, we can now safely transfer the savings to the bank, this gives me peace of mind”.

During the initial stages of the project, beneficiaries faced challenges like traveling long distances to save their money at the bank. However, with interactions between the Consortium and FSPs, agents from the FSPs now visit the communities to collect savings. There were also challenges with KYC requirements, but the consortium liaised with FSPs to simplify the process for beneficiaries.

At VisionFund Ghana, our mission is to alleviate poverty in Ghana, and even as this project comes to an end, the commitment to empower VSLAs in rural communities continues. In FY25, plans are underway to create nine new zones in the Northern Region and four in the Savannah Region dedicated to empowering these communities.

This project has not only improved financial inclusion but also empowered rural women, enabling them to take control of their finances, grow their businesses, and support their families. The success stories of Gladys, Awinbila, and Zainab are just a few examples of the positive impact of this initiative, showing the transformative power of partnership and community empowerment.

 

Photos and story by Angelina Hawa Ayamga