Success Story

Kismayo: Village Savings and Loan Associations to help vulnerable families

In Somalia, flooding and recurrent desert locust infestations have contributed to depleted harvest yields in 2020, exacerbating food insecurity and hampering livelihoods. The same year, over 650,000 people have been impacted by floods throughout the country, these climatic hazards caused destruction throughout communities, particularly in IDP sites. Silting of the major rivers in the country and lack of maintenance of irrigation infrastructure deteriorated the situation even more.

Families in rural areas are especially impacted by these climatic hazards. They struggle to have steady jobs and therefore income and have difficulties to save money.

To respond to this situation ACTED established 10 Village Savings and Loan Associations (VSLAs) in July 2021, with a total of 200 participants in both IDP sites and rural villages in Kismayo.

Rural families face many challenges to improve their income

In Kismayo, recurrent crises, including drought, floods and displacements have undermined livelihoods and people’s ability to engage in the market. In addition, the unreliable availability of casual work, high unemployment due to COVID-19 restrictions, and debt due to shelter and livelihood damages have caused the deterioration of income.

Farming and livestock rearing remain the main source of income in rural villages in Kismayo. With a smaller proportion of the community being involved in trading or manual labor. None of the income source were found to be stable year-round as a consequence of droughts, floods and conflicts. Additionally, saving is uncommon, since most community members prefer to invest their money in assets, such as crops and livestock – but effective saving can provide an important financial safety net for vulnerable families.

ACTED increases resilience through Village Savings and Loan Associations

A VSLA is a self-managed group that does not receive any external funding, yet provides a safe place to save money. A two-day training session was given to each group on Village Savings and Loan Associations modules on book keeping, entrepreneurship skills, business skills, savings and loan methods, record-keeping, loaning systems and daily saving. In VSLAs, community members form a self-managed group in which money is saved and members can take out loans from the savings to invest in a project or to cover sudden cash needs.

Village Savings

Recently we sold 24 sacks of beans and got a profit of $300, My whole life has changed now – you can just see how I am looking.


For the members of the community, VSLAs provided a safe place to save their money, to access loans, and to obtain emergency support. It has also made beneficiaries more independent from humanitarian aid and improved their resilience. Members took out loans from the savings and interests to invest in small businesses.

ACTED, with the support of USAID brought a permanent solution that can support vulnerable communities and improve resilience at the household and community level through Village Savings and Loan Associations.
This project has improved the vulnerable households living conditions and contributed to development of a saving culture.