VSLA Contributions

This is to encourage regular financial discipline among members by pooling savings. During each scheduled meeting, members contribute money to the group by purchasing shares. Each member may buy between 1 and 5 shares per meeting. Share quantity can vary each meeting depending on the member's financial situation. The monetary value of one share is set at the beginning of the savings cycle and remains unchanged until the end of the cycle. A savings cycle typically spans 8 to 12 months, after which all savings are redistributed.

Share Purchase

In a traditional VSLA, it is compulsory for a member to buy shares in order to save. Every time a VSLA member saves money, they buy a certain number of shares. Members can buy a minimum of 1 and a maximum of 5 shares per meeting. The system records the number of shares each member buys per meeting, which contributes to their total shareholding.

• Each share has a fixed value (e.g., 1 share = GHS 5).
• Over the course of the savings cycle (typically 9–12 months), members accumulate shares by consistently contributing at meetings.
• At the end of the cycle, the total money in the VSLA, omprising all savings, loan interest, fines, and fees, is added up.
• This total pool is then distributed back to members based on the number of shares each member holds.

Example:

Let’s say the VSLA has GHS 10,000 at the end of the cycle. If a member holds 100 out of 1,000 total shares, they own 10% of the total shares. That means they’ll receive 10% of GHS 10,000 = GHS 1,000 as their payout.

Why This Matters:

• The more a member saves (by buying more shares), the more they earn at the end.
• It incentivizes regular savings.
• It’s a fair system since each member’s return is directly proportional to their contribution.

Example: Ama's Contributions

Week	Ama Contributes	Shares Bought	Total Shares So Far	Total Savings Value	Leftover Amount
Week 1	GH₵20	(GH₵20 ÷ GH₵5)	4	GH₵20	–
Week 2	GH₵10	(GH₵10 ÷ GH₵5)	6	GH₵30	–
Week 3	GH₵23	(GH₵20 ÷ GH₵5)	10	GH₵50	GH₵3

You will notice there is a leftover GHS3 in Week 3. What happens now? The amount can be:

• Added to a welfare or emergency fund
• Carried forward to the next meeting or
• Returned to the member

Metric	Value
Total shares	10
Total amount saved	GH₵50
Leftover/welfare (opt.)	GH₵3

End of Savings Cycle Calculation

Metric/Component	Calculation	Value
Ama’s total shares		45
Total shares by all members		900
Group profit (interest, fines)		GH₵900
Ama’s profit share	(45 ÷ 900) × GH₵900	GH₵45
Savings refund	45 shares × GH₵5	GH₵225
Total received by Ama	GH₵225 (refund) + GH₵45 (profit)	GH₵270

Social Fund

The Social Fund serves as a dedicated emergency support mechanism within the VSLA, operating separately from the main savings and loan fund. Its primary goal is to provide non-repayable financial assistance to members facing unexpected life events or hardships.

This fund reflects the core values of solidarity, mutual aid, and communal resilience. It ensures that members can access some form of relief without falling into debt during times of crisis.

Funding Mechanism

The fund is built and sustained through small, regular contributions from all members during each meeting. These contributions are:

• Fixed: A predetermined, low-cost amount—commonly GHS 1 per member per meeting. The low contribution amount ensures accessibility while enabling the fund to grow steadily over time.
• Mandatory: Collected at every meeting regardless of whether the member contributes savings or requests a loan
• Pooled: Into a separate balance exclusively used for social welfare cases

Use Cases

Disbursements from the Social Fund are intended for genuine, verified emergencies that affect a member’s well-being or ability to participate in the group. Typical scenarios include:

• Medical emergencies or hospitalization
• Funeral expenses for immediate family members
• Natural disasters or fire outbreaks affecting the member’s property
• Bereavement support
• Other unforeseen personal crises, as approved by the group

All requests are subject to group review, and disbursements are made based on available balance and urgency of need.

Nature of Disbursement

The Social Fund operates on a grant-based model:

• No repayment is expected from the recipient
• Members do not forfeit shares or savings when receiving support
• Amount disbursed is typically modest and capped by group policy to preserve fund longevity

This model distinguishes the fund from loans or savings and reinforces its role as a mutual aid tool rather than a financial product.

Governance & Tracking

• The group may appoint a social fund committee or rely on existing leadership to vet and approve requests
• All disbursements are documented and tracked digitally in the system, including:
  • Member ID
  • Amount disbursed
  • Date
  • Reason/emergency type

Transparency

To prevent abuse and maintain trust:

• All members are informed about current fund balances
• Clear criteria for disbursement are defined in the group constitution or bylaws
• Members can propose changes to contribution amounts or approval rules at the end of each cycle

Optional Enhancements

• Groups may allow voluntary top-ups from members
• The fund may receive external support (e.g., NGOs or matching grants) to increase capacity
• Unused funds can be rolled over into the next cycle or redistributed, as determined by the group

Fines and Fees

Fines and administrative fees serve as an important behavioral tool within the VSLA. Their main objective is to promote:

• Discipline: Ensuring members adhere to the group’s rules and agreed schedules.
• Accountability: Dissuading actions that disrupt operations, such as tardiness or failure to repay loans on time.
• Consistency: Reinforcing member engagement and attendance.

These small monetary penalties help maintain group cohesion and smooth functioning over the life of each cycle.

Common Infractions

Infractions are typically outlined in the group's constitution or by-laws and agreed upon at the beginning of each savings cycle. Examples include:

• Lateness to meetings: Members arriving after the scheduled start time may be fined.
• Absenteeism: Missing a meeting without prior notice or legitimate reason.
• Late loan repayment: Failing to repay loans on agreed dates results in a financial penalty, separate from interest.
• Disruptive behavior: Talking out of turn, failing to follow group protocol, or disrespecting leadership.
• Failure to contribute savings or social fund: Missing required contributions on the due date.

Infractions are tracked during each meeting and recorded in the system to ensure fairness and avoid disputes.

Fine Amounts

Fines are fixed and clearly defined in the group’s governance documents to ensure uniform enforcement. Examples include:

• GHS 2 for lateness
• GHS 5 for missing a meeting without excuse
• GHS 3 for late loan repayment (in addition to interest)

Amounts can vary from group to group based on agreed-upon values during group formation or cycle reset. All fines are announced publicly at meetings to maintain transparency.

Allocation of Collected Fines

All funds collected from fines and administrative fees are pooled into the group's general fund, and:

• Treated as additional income for the group
• Used to increase the capital available for lending
• Included in the final share-out calculation at the end of the cycle

Record Keeping and Transparency

The system logs each fine with the following details:

• Member ID
• Date of infraction
• Type of infraction
• Amount fined
• Paid status (Yes/No)

This provides a digital trail that group leaders can audit and report on. It also helps during end-of-cycle evaluations to identify consistent rule-breakers or potential financial risks.