Financial Management of Village Savings and Loans Associations in West Nile, Uganda

Village savings and loans associations (VSLA) groups have recently garnered popularity in rural and urban settings. This study aimed to assess the relevant financial management practices in the context of VSLA in West Nile, Uganda, and provide recommendations for robust and sound VSLA financial management practices for the effective management of grouped financial resources. This study adopted a quantitative research design, used a questionnaire to conduct a field survey, and employed SPSS for data analysis. Descriptive statistics, frequency, and percentile were utilized to analyze data collected from the study sample of 196 VSLA groups whose management committees were the unit of enquiry. Stratified and simple random sampling techniques were used. The study found that the number of members that a VSLA group has typically ranged between 25 and 30, of which 87% were between 34–54 years, and 62% of the groups had saved for 1–5 years. This study identified the interest earned, penalties or fines charged, savings of members, and support from non-governmental organizations and government in the forms of donations and grants as major sources of income of the VSLA group. Record keeping, security of savings from members who saved by keeping their money in banks, budgeting, segregation of duties among management committees, registration status, and the availability of a functional constitution to members were identified as good financial management practices. This study indicates that good financial management practices yield an opportunity for VSLA groups to borrow large amounts from financial institutions for investments. It also ensures proper planning, revenue and expenditure monitoring, transparency, and better utilization of hard-earned financial resources, while also boosting the confidence and trust of the group members. Keywords: Associations, Financial, Loans, Management, Savings, and Village.