Moyna, is an entrepreneur in rural southwest Bangladesh with assets worth $771 including a fish farm and a small business selling puffed rice, a popular local snack. Moyna has savings of $70.80 in her personal bank account and also has 35 shares worth $20.65 in a community savings group known as a ‘Village Savings and Lending Association’ (VSLA). From her first share out, Moyna spent the full $21 on her children’s education. Moyna’s achievements are remarkable as in some parts of southwest Bangladesh, between 24 and 25 percent of households live below the poverty line of $1.90 a day. Since 2015, USAID’s ‘Nobo Jatra-New Beginning’ project, implemented by World Vision Bangladesh, has supported 56,963 poor and extreme poor women, like Moyna, to form VSLAs. Remarkably till now, these groups have saved $882,991 with average annual savings of $26 per member. 22,554 women have taken loans – 80% have used these loans to start or grow off farm and on farm livelihoods and to meet household needs.
Moyna has now attained a steady income with diversified livelihoods; but the journey was not always easy. Moyna was born in a poor family; and at the age of 17 she married Ismail Sarder also from a poor family. Ismail was a day laborer and the couple struggled to make ends meet with three daughters.
Moyna and Ismail’s lives transformed when Moyna was selected as a participant in Nobo Jatra’s Ultra Poor Graduation (UPG) program in 2017. She was registered as a member of an Entrepreneurial Literacy Center and received training on basic literacy, and business concepts for 9 months. Moyna also received monthly cash transfers of $ 1.80 during training to support her family to buy food. During this time, Moyna also joined the Bamia Village Savings Lending Association (VSLA) where she was able to start saving and access loans – something she had never had the chance of doing before. As part of the Ultra Poor Graduation program, Moyna prepared two business plans; one plan was for goat rearing and another plan was for a spicy puffed rice business where she can sell the snack at market places and outside schools. After successfully completing the full 9 months of entrepreneurial literacy training, Nobo Jatra provided Moyna with a digital cash transfer of $177.01 to initiate her two chosen businesses.
Since then, Moyna has gone from strength to strength. Business is thriving; she has 5 goats, 20 chicken and 6 koel birds and is able to sell chicken and koel eggs on regular basis. After meeting household consumption needs, Moyna has been earning $35 - 47 per month by selling vegetables at the local market. Moyna’s spicy puffed rice is famous in the area and also draws a regular income. Motivated by Moyna’s success, Ismail now buys wholesale fish and sells in the local market. Ismail also sells fish harvested from the family pond and this additional income helps to meet family needs.
For Moyna the biggest blessing is being able to afford quality education for her three daughters. With the profit from her businesses Moyna could afford her eldest daughter’s university fees and her two younger daughters high school expenses. Having access to loans through the Village Savings and Lending Association has been critical, Moyna has taken a loan of $106.21 to meet her children’s education expenses. Moyna has also invested $33.69 in her homestead garden after receiving money from her second share out cycle.
As Moyna notes, “we do not have access to bank; local lenders ask for higher interest against loan, thus Village Savings and Lending Associations are accessible to us and meet our needs. When we are in trouble, we get loan from this association. I am engaged in goat rearing, fish culture and spicy puffed rice business. Due to lockdown I had to stop selling puffed rice for a while but still I could earn from fish culture, vegetable sale, and goat rearing”.
COVID-19 and cyclone Amphan pose health and economic risks to VSLA’s as markets faltered, mobility was restricted and community gatherings scaled back due to lockdown. In a completely unprecedented situation, almost all 2,741 VSLA groups supported by Nobo Jatra had funds in savings boxes, however, due to lockdown restrictions, the groups were unable to meet and follow group procedures for taking loans. Faced with this conundrum for two months (till Government restrictions on gatherings were relaxed), VSLA members had to find alternative coping mechanisms.
Hanifa, chairperson, of the Bamia VSLA, which Moyna is a part of, noted, “All VSLA activities were stopped since lock down, which was ordered by sub district administration. After discussions with the VSLA secretary and management team; we decided to continue loans and share-out of profit maintaining social distance to keep the VSLA profitable. Now we use gloves for counting money and wash hands before and after the sessions. Nowadays we arrange meeting in the open field; thus we get enough space for 8 persons. We use mobile phone to inform members about time and venue of meetings”.
Since the onset of the Covid-19 crisis, VSLA’s have been taking the lead in shaping how the groups restart operating and Nobo Jatra have been supporting them to navigate adaptations. In early April, the project developed a remote monitoring tool for use by frontline staff to clearly understand what the VSLA’s wanted to do. VSLA groups voted to reduce the frequency of meetings from weekly meetings to fortnightly or monthly meetings based on the severity of Covid-19 in their respective communities. Meetings were also redesigned to limit the number of physical participants in each meeting whilst ensuring that the procedure stays transparent and follow health and safety measures for all group members. VSLA’s agreed to have 8 members present in each meeting from start to finish.
A number of health and hygiene measures were agreed as part of the VSLA adaptation strategy. Social distancing of 1 meter is a must and group members are required to wash hands at the beginning and at the end of each meetings. Handwashing supplies and gloves for people who count money and hold the keys to the cashbox are prioritized. As part of the adaptation, VSLA’s also agreed that groups should have the flexibility to increase ‘social funds’ to help members mitigate the health crisis. Till now, 57 VSLA groups have increased their social fund to prepare to cover potential medical treatment and other emergency needs. This indicates the role of VSLA’s as a safety net whereby members take on social responsibility to support communities through the pandemic.
In March, 7.26% of VSLA members took loans – however, upon restarting in June, there is a sharp increase to 11.39% members taking loans. Given the reduced or total lack of incomes during Covid-19 and the losses from cyclone Amphan, members need access to finances to meet immediate household consumption needs, repair homes damaged by cyclone Amphan and revive livelihoods. What has quickly emerged is that VSLA’s are resilient, resourceful and are at the frontlines of the Covid-19 crisis providing members, like Moyna, with much needed access to finances so that they can stay resilient and strong even during a dynamic, evolving pandemic.