Floresta –Tanzania and Catholic Relief Services (CRS)–Sierra Leone are partners in SEEP’s Rural Agricultural Finance and Food Security (RAFFS) Practitioner Learning Program (PLP) and have been jointly conducting research on rural agriculture, finance, and food security.

CRS and Floresta’s hypothesis was that VSLAs contribute to food security by increasing food availability, through improving agricultural productivity, and increasing food access, through an increase in household income.

By analyzing and documenting the linkage between VSLAs and food security it is the hope that other practitioners will be more informed and able to develop programs based on sustainable rural and agricultural finance models that stimulate economic growth and food security at the community and household level.

To investigate their hypothesis, CRS and Floresta researched these questions:

1) What are the purposes for which loans are taken in VSLA groups?
2) Is there a seasonal pattern to loans in VSLA groups?
3) Is there a relationship between gender and loan type?
4) Do the loans accessed by VSLA members influence food security in communities? If yes, how?
5) How do savings and social funds influence food security?

The following loan types were studied during the research period:

  • Agricultural Loans: Loans taken for the purpose of agricultural production, including purchasing inputs (seeds and tools), hiring labor, renting land, building forest plant nurseries, and buying livestock and feed.
  • Health loans: Loans taken for health reasons, including paying for medicinal drugs, doctors’ visits, hospitalization, etc.
  • Educational Loans: Loans taken to pay for school fees, school uniforms, shoes, books and other learning materials.
  • Start-up Loans: Loans taken for the purpose of starting a business. (Start-up loans are business loans taken by members for the first time.)
  • Business Loans: Loans taken by members to support existing businesses and/or to set up microenterprises. (Women typically take out business loans to trade agricultural produce, such as bananas, palm oil, rice, and imported food items.)
  • Household Food Loans: Loans taken to purchase food for the household.
  • Household Improvement Loans: Loans taken to purchase items for household use, including furniture and other household items.
  • Consumption Loans: Loans taken out to pay for anything other than the loan types listed above, such as to settle debts, purchase clothing, or celebrate seasonal events or festivals.
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