The Power of Savings and Solidarity

The South Omo zone, part of the larger Karamoja Cluster, faces layers of challenges—recurrent conflict, climate change, and deeply rooted gender inequality. Scarcity of natural resources, intensified by environmental shocks, drives competition over water and grazing land among agro-pastoralist communities—often igniting conflict. These realities, coupled with harmful gender norms, place an especially heavy burden on women and youth.

Recognizing these intersecting challenges, the SPREAD Project aims to build resilience through income diversification, sustainable natural resource management, climate-resilient livelihoods, and inclusive peacebuilding. One important pillar of this work is strengthening women’s economic agency through the establishment of Village Saving and Loan Associations (VSLAs).

What is a VSLA?

A Village Saving and Loan Association (VSLA) is a community-based microfinance model where a group of people pool their savings and use those funds to offer loans to each other, often with low interest rates. VSLAs provide a critical financial lifeline in areas where access to banks or formal lending institutions is limited.
Through the SPREAD:Peace and Resilience project, 10 VSLA groups were organized across Dasenech and Nyangatom districts in the Southwest Ethiopia Region. Members received training covering VSLA concepts, the development of group constitutions and by-laws, saving procedures, loan disbursement and repayment procedures, and graduation processes. The groups were also trained in conflict mitigation and group dynamics to help prevent disputes that could threaten sustainability. Each group was provided with essential kits—including secure saving boxes, padlocks, and stationery—enabling them to manage funds safely and build resilience together.
The trainings were facilitated by personnel trained by DanChurchAid (DCA) to ensure a consistent and unified approach across all groups. Throughout the process, the Ethiopian Catholic Church (ECC), took the lead in providing ongoing monitoring and mentorship to the VSLA groups. This close synergy between DCA and ECC ensures that the groups not only establish strong foundations but are also guided towards long-term growth, cohesion, and sustainability.

Ala Kara: the “Happy” VSLA

Every Tuesday, in the heart of Ayipa Kebele in Nyangatom Woreda, 20 women gather in a circle. They are members of the Ala Kara VSLA, one of the 10 groups formed under the SPREAD Project across Southwest Ethiopia’s South Omo Zone.

Ala Kara—which loosely translates to “happy”—lives up to its name. “Ala Kara has been making a difference in our lives,” says Areka Tuguri, the group’s treasurer. “It is good to know that if some emergency happens, we have savings we can access. It has given us a sense of safety.”
Through consistent weekly savings, the members of Ala Kara have begun to build confidence—and capital. They have opened a bank account where they deposit their savings. Equipped with knowledge in financial literacy and new skills, they now aspire to bigger goals.

“We have learned about entrepreneurship and business management during the training,” shares Areka. “The consensus among the group is to start a business together, with plans to open a shop. It will help grow our capital and allow members to take out loans to start their own businesses as well.”

“We have learned about entrepreneurship and business management during the training,”

© Nebiyat Seifedin

In a region grappling with the compounded impacts of conflict, climate change, and entrenched gender inequality, Village Savings and Loan Associations (VSLAs) offer a practical and empowering solution. By fostering collective saving and access to micro-loans, VSLAs enable women and youth—who are often the most affected by these crises—to build financial resilience and pursue income-generating activities. This economic empowerment reduces vulnerability to external shocks and strengthens social cohesion.

Through the SPREAD project, these locally rooted savings groups are becoming vital pillars of stability, resilience, and hope in a region under strain.