Social Funds

A portion of the shares contributed by VSLA group members are put into the social fund pot. Social funds can be accessed by members (only with the group’s permission) in the form of an interest free loan or a grant. The approved uses for social funds are agreed upon by group members and vary significantly between savings and internal lending communities (SILC) in Sierra Leone and village community bank (VICOBA) groups in Tanzania.

It was found in the CRS and Floresta comparative case study that the use of social funds has a weaker link to food security than other loan types or savings. In SILC groups supervised by CRS-Sierra Leone, social funds were primarily used for emergencies, funerals, and graduation ceremonies.  In Floresta’s VICOBA groups, social fund usage is restricted for environmental uses such as purchasing tree-planting materials, education and medicinal purposes.

Although the linkages between social funds and food security is not as obvious, social funds utilized for health purposes could positively impact food security by improving utilization of food. As explained in the definition for utilization in the Food Security page, the state of a person’s health can significantly impact the ability of their body to absorb essential vitamins, micronutrients, and minerals from food. By addressing certain health problems, individuals can improve their food security by better being able to utilize the nutritious components of food items.

 

 

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