KRLON Financial Federation: A solution to VSLAs Groups in Kyaka II

Introduction

The Kyaka Refugee Leadership Organization Network (KRLON) proposes a Financial Federation under the Livelihood Sector to empower the Village Savings and Loan Associations (VSLAs) within the Kyaka II Refugee Settlement and surrounding host communities. This initiative aims to establish a central financial hub, enhancing the sustainability and efficiency of these groups to improve economic opportunities and resilience within the refugee and host communities.

Problem Statement
The VSLAs in Kyaka II face challenges that hinder their potential impact, including:

1. Limited Financial Management Knowledge: Many VSLA members lack adequate skills in managing finances, impacting effective savings, loan, and investment operations.
2. Insecurity of Savings: Without reliable storage, savings are vulnerable to theft or loss, posing a significant risk for members.
3. Inadequate Financial Systems: The current systems are often basic, limiting transparent record-keeping and financial oversight.
4. Insufficient Funds for Loans: Limited access to funds prevents VSLAs from providing substantial loans, impacting entrepreneurs and those needing financial assistance.
5. Absence of a Central Account: Fragmented operations due to the lack of a centralized financial account hinder coordination and financial effectiveness.
6. Lack of Collective Bargaining and Investment Options: Without a unified approach, VSLAs struggle to negotiate favorable terms or pursue larger investment opportunities.

Vision
“To empower VSLA groups in Kyaka II refugee settlement with knowledge, resources, and collective power for financial security, transparency, and sustainable growth, thereby fostering a resilient and prosperous community.”

Objectives

1. Financial Literacy Training: Equip VSLA members with budgeting, savings, and investment knowledge for informed decision-making.
2. Enhanced Security of Savings: Implement secure storage mechanisms, such as mobile banking, to protect savings.
3. Improved Financial Systems: Introduce standardized financial systems, like QuickBooks, for transparent tracking and reporting.
4. Increased Funding Access: Partner with microfinance institutions to provide access to larger loan funds.
5. Establish a Centralized Fund: Create a central financial account for streamlined operations and efficient fund management.
6. Encourage Collective Bargaining: Promote collaboration among VSLA groups to negotiate better terms and pursue joint investments.

Structure and Responsibilities

• KRLON Livelihood Consortium Team: Responsible for mobilizing, training, and providing ongoing support to VSLA groups for seamless integration.
• Financial Federation Account: A centralized account will secure all VSLA savings, ensuring transparent and secure fund management.
• Financial Management System: QuickBooks will manage finances, with trained personnel generating accurate financial reports.

Benefits

• Enhanced Security: Centralized savings reduce the risk of loss, securing members’ funds.
• Transparency and Accountability: Financial reporting through QuickBooks will build trust and ensure accurate tracking.
• Capacity Building: Financial literacy training will equip members with essential skills for effective financial management.
• Access to Funds: The centralized account will ease loan access and allow for emergency funding.
• Economic Empowerment: Pooled resources will enable larger projects, benefiting women, youth, and persons with disabilities in the community.

Implementation Plan

1. Awareness and Mobilization: Conduct meetings to introduce the federation concept and explain its benefits.
2. Training and Capacity Building: Provide training on financial management and use of QuickBooks, along with continuous support.
3. System Setup: Establish the central account and integrate QuickBooks with trained personnel managing operations.
4. Ongoing Support and Evaluation: Regularly evaluate the federation’s performance, adjusting as needed.

Conclusion
KRLON’s Financial Federation will secure, streamline, and enhance savings for VSLA groups, empowering the Kyaka II community. By addressing critical financial challenges, KRLON supports a sustainable path toward economic growth and resilience, benefiting both refugees and host communities. Through collaboration, we can transform VSLAs into economic pillars, fostering opportunities and a prosperous future for all in Kyaka II.