Here is a recent piece of work done on VS&L in Zanzibar.  It is an article
coming up in Small Enterprise Development.  The background is that CARE
started to do VS&L in Zanzibar in 2000 and stopped in 2006, and left the
island, so there was no further contact.  DFID and DFS (Decentralised
Financial Services) in Nairobi did a follow-up study last year and came
up with some startling discoveries. 

These can be summarised as:

1. a  258% increase in the number of VSLAs: none had ceased to function

2. Total 6-year member dropout from individual VSLAs was 12%

3. the average VSLA with 29 members was liquidating $4,000 a year comprised of
 savings and earnings

4. average yield was 53% on the final balance of annual savings

5. training quality was poor (a rather odd conclusion in the light of the results)

It also raises an important issue about the use of standard financial measures: PAR,
at 27%, was much, much higher than could ever be accepted by an MFI, but loan losses
were negligible.  This is a hot issue because standard PAR assumes a steady stream of
regular repayments, which is exactly how a VS&L group does NOT work.

Anyway, a very impressive piece of work and one that shows how community-based
microfinance can offer services of significant financial scale: a finding that
may relieve some doubts about whether or not this type of microfinance is irrelevant
or of real value.

Hugh
VSL Associates
Neuenkamper Strasse 27
42657 Solingen
Germany

Tel:   49 (0)212 247 2435
Fax:  49 (0)212 818091
Web: www.vsla.net