June 27, 2022

How a women-led Burundian VSLA turned into a thriving business

With the help of coaching and training, a women-led village savings and loan association (VSLA) flourished into a business that supports the livelihoods of its members and employees in Burundi.

In Burundi, there are thousands of village savings and loan associations (VSLAs). A VSLA is a self-managed savings group, usually consisting of between 10 to 25 people from the same community who pool their savings together for each individual to have the chance to take out small loans or for the group to jointly enter into an economic activity together. In this case, any profits are divided equally among the original contributors. 

The model, which has long been used throughout parts of rural Africa, allows members to access finance when formal financial services are typically very limited to them. In Burundi, where almost 70% of the population relies on agriculture for income generation, VSLAs are pooled to rent fields, pay for labour to sow rice or purchase a pig, for instance. Operators of VSLAs learn basic management skills but often need support to effectively run the operation as a thriving business, which could enable them to rise out of poverty.

VSLA to business
One woman in Burundi is doing just that. Gorette is from a rural village in the hills close to Rumonge and never had the chance to attend high school. Despite growing up in poverty, she and 30 other women decided to create a VSLA to cultivate lenga-lenga (amaranth greens) and tomatoes. At the end of each year, they shared the profits between them and each woman could spend her part as she pleased.

Sensing the potential of Gorette and others, SPARK presented them with the opportunity to become a business. However, that meant that the majority of the profits needed to be reinvested. Not all women were ready for this model and only 16 of the original 30 remained. “The true entrepreneurs”, says Gorette. By reinvesting their profits and adding to it from their personal savings, the group were able to purchase a milling machine for manioc. They named their business Twungurunani.

Coaching helped Twungurunani in obtaining a loan to acquire the grinding machine which allows the women to produce manioc flour © 2022, SPARK

Shift to an entrepreneurial mindset
Twungurunani is one of 16 small and medium-sized enterprises (SMEs) from Rumonge that have benefited from advanced training and proximity coaching by CEMAC business coaches, SPARK’s local partner

In the beginning, coaching sessions were needed at least once a week and the biggest hurdle was the shift from a VSLA mindset to an entrepreneurial mindset. “The coaching has enabled us to overcome the VSLA way of thinking and to develop an entrepreneurial vision.” It was particularly hard to reinvest their profits when their children had so many immediate needs, but now the women’s revenues have increased significantly. As a result, their children’s school attendance rates and access to healthcare have gone up as well. “In the short term, it felt like we were depriving our children but in the long term they are much better off.”

“Women have a thousand hands”
Operating a successful business as a group of women is no easy feat. Learning how to juggle the business and childcare needs, as well as the social stigma of being a woman business owner, means a lot of multitasking. Fortunately, there is a great feeling of solidarity among them and many hands to help as the business now employs four men too. “There is a saying in Kirundi that translates as ‘women have a thousand hands’”.

"Women have a thousand hands" © 2022, SPARK
"Women have a thousand hands" © 2022, SPARK
The men of the community did not look favorably upon Twungurunani’s activities at first. The business now employs some of these men © 2022, SPARK

Loan for soap production
With coaching and training sessions, the Twungurunani women have learnt how to keep financial records. With these, they were able to receive a loan from a micro-credit institution to purchase a grinding machine to produce palm oil. The entrepreneurial start was challenging, but now that they have made that step, they do not plan on stopping. Their next project is opening a soap production unit. 

Gorette and her partners are very proud of what they have accomplished. “The women who left because they did not want to shift from VSLA to business now want to come back.” The Twungurunani now hopes to inspire more VSLAs to take the leap of faith and become a thriving business.