Problems and Purpose

Three out of six North-Eastern states in Nigeria have been facing insecurity since 2009 with millions of people displaced and lost their means of livelihood due to Boko Haram insurgency in their communities [1]. 

In 2021, with a grant from Mercy Corps Nigeria, Riby started the implementation of the Feed the Future Nigeria Rural Resilience Activity (RRA) aimed at facilitating economic recovery and growth in the conflict-affected areas, and sustainably moving the affected people out of chronic vulnerability and poverty via expanded opportunities [2].

Background History and Context

North-East is one of the six geopolitical zones in Nigeria where 80% of the population relies on agriculture as a means of livelihood. The region has been facing insecurity since 2009 with millions of people displaced due to Boko Haram insurgency in the region [1]. Boko Haram is an Islamic sect that believes northern Nigeria's politics has been seized by a group of corrupt, false Muslims. It wants to wage a war against them, and the Federal Republic of Nigeria generally, to create a “pure” Islamic state ruled by sharia law. Between 2009 to 2015, there were almost weekly attacks by the militants' planting bombs in public or in churches in Nigeria’s northeast. The group has also broadened its targets, away from direct revenge attacks on the state to include other representations of authority and communities as well as the kidnapping of school children [1]. Since 2015, the group activities have been suppressed by the Nigerian military giving room for the integration of millions of displaced people back to their communities. The Rural Resilience Activity is a Nigeria Feed the Future initiative funded by the United States Agency for International Development (USAID) and implemented by Mercy Corps and other partners aimed at facilitating economic recovery and growth in the conflict-affected areas and seeks to increase incomes and improve the livelihood and resilience of the affected households through market-led growth [4]. This is done through the deployment of technology for ease and fostering a saving culture, conducting education and training. [4] A report on this project was commissioned by the United Nations Development Programme (UNDP), is part of UNDP’s work on conflict prevention, peacebuilding and responsive institutions. [1].

Organizing, Supporting, and Funding Entities

Village Savings and Loan Association (VSLA) is a group of independent practitioners, working to spread the Village Savings and Loan (VSL) Savings Group (SG) model worldwide. Since 1991, working mainly through NGOs, VSLA has helped millions of poor people access and manage their own basic financial services [5] VSLA employs five hired executives. [5] This case study explores how the strengthening  VSLA in Dakwa community, Hong local government area of Adamawa, Nigeria led to the economic empowerment of the group members. The Rural Resilience Activity’s Feed the Future initiative to strengthen the activities of the group was funded by the United States Agency for International Development (USAID) through Mercy Corps Nigeria. An organization that since 2012, Mercy Corps has been working in the most marginalized regions of Nigeria to deliver urgent, lifesaving assistance and build the resilience of communities. [6] The implementation of the initiative was carried out by Riby, a private digital financial services provider [4].

The VSLA group has an existing structure which makes engagement with the members of the group easier. The leadership of the group is made up of five executives who coordinate the weekly savings and disbursement of loans to members who apply for loans. A meeting was first held with the leaders of the group to discuss the asset financing initiative before it was passed to the members of the group. A second engagement was held with a large audience that involved 73 of the members and the 5 executive members. A local team member was hired in the community to continue the engagement and eventual setup and implementation of the initiative.

Participant Recruitment and Selection

The local project team did the participant recruitment. In each local government, a project has a local government coordinator who coordinates project activities for the organization. In key communities, we hire agents who are from the community. The agents did the recruitment through one-on-one engagement with leaders of identified groups. The recruitment of  Dulchunele Niihama VSLA was done by the agent directly through community outreach [4]. 105 members of the community participated. [4] A key principle of the group is voluntary and open membership. Therefore, the one hundred and five members of the group voluntarily signed up to participate in the project with five executive members. No incentives were given for participation. [1] They were onboarded on a group management digital platform that enabled them to start weekly savings. All the members were also trained in financial literacy and leadership. Technical support was also provided that enabled the group to access credit facilities. The focus on recruitment was on women who engage in farming activities, growing soybeans, groundnuts, rice, and sesame because they are the most affected individuals in the community. [l]

Methods and Tools Used

The multi stakeholder group process was first used to engage the leadership of the VSLA to explain the concept, essence, and opportunities of the project. This also enables the project team to get more information about the dynamics and structure of the group as well as their activities. The second method used was a town hall. A town hall meeting was held to meet a larger number of group members to discuss the initiative and implementation plan. The last method used was the citizens’ proposal method where the group members were engaged in advocacy events that enabled the group members to share their challenges through open deliberation and the kind of support they would like to get to overcome them. The VSLA leaders and the local project staff facilitated the event with the members.

A group-based model was adopted for the project implementation because it is effective in empowering the people as it has become the bridge, bringing all the members together and providing the building blocks necessary to boost growth and enhance individual members’ personal growth. The group model for saving, borrowing, and promoting collective growth is a widespread method to encourage inclusion.

What Went On: Process, Interaction, and Participation

Cooperation and a multi-pronged approach are paramount in defining and addressing the development challenges arising from the conflict. [1] The first step, in this case, was a need assessment activity carried out by the project team and the participants. Members of the group through town hall meetings deliberated on the most pressing needs that will affect the group members. Just like most rural farmers in Nigeria, farming households in the communities do not engage in farming activities during the dry season due to the lack of rain. Nigeria has a single rainy season (April to September) and a dry season (December to March) [4]. However, access to an irrigation pump enables them to engage in all-year farming leading to an increase in the quantity of agricultural produce and income. Because the issue is common and aligns with the needs of every member of the group, there was a consensus to jointly save and purchase solar irrigation pumping machines. The members of the group as a result agreed on making weekly savings toward the purchase of the assets by July 2021. After the savings reached a certain amount, the group was provided with a group loan that served as momentum to support their investment to purchase the irrigation solar pumps. 

The 105 members of the group participated in weekly savings from July 2021 to September 2021 for 12 weeks. They pulled a total of N1,260,000 as savings during the period. The group members collectively decided to purchase seven solar irrigation pumps that were needed to enable them to engage in all year-round farming activities and lease out at a fee to other community members. The total cost of seven units of solar water pumps was N3,167.017. With their savings of N1,260,000, they requested an additional N1,907,017 as credit. The credit agreement was for 3 months with a moratorium of one month, and a bi-weekly payment of N317,886, the VSLA completed the payment of the pumps within two months to fully own the solar pumps. By December 2021, the group had completed the credit facility payment to fully own the assets due to increased leasing above the projected.

Influence, Outcomes, and Effects

For this case the participatory process achieved its intended effect as it led to the economic empowerment of the group members. The initiative successfully achieved its intended goal of providing alternative income-generating opportunities during the non-farming season when households in farming communities were typically idle. [1]  Starting in June, when the facilitation began, the group members were able to purchase assets by October. This enabled all members to be able to engage in all-year farming activities leading to improved yield and income. The project had a positive impact on the savings culture of the group members. They gained a better understanding of savings and investment. Additionally, the group members agreed to lease the irrigation pumps to non-members at a fee, which served as an alternative means of income generation. The profits earned from leasing were shared among the members of the group as profits and invested in other lucrative ventures. The initiative was a great success and Riby was able to replicate it in other communities, which also saw positive results. [2]

Analysis and Lessons Learned

It can be said that the initiative was a great example of a group-based model that empowered underserved communities and helped them improve their economic livelihoods, while also providing sustainable means to fight poverty. [4] Firstly, the group themselves proposed the solution. Secondly, participants came together to engage in activities that promoted collective growth among all members. The initiative encouraged joint asset purchases, which not only empowered VSLA members but also the community as a whole. Additionally, the initiative led to behavioral changes in the community and an impressive commitment towards savings and collective investment. [4] Overall, the initiative was a successful use of a group-based model to uplift the lives of underserved communities. [4]

References

[1] United Nations Development Programme. (2021). Assessing the impact of conflict on development in north-east Nigeria https://www.undp.org/sites/g/files/zskgke326/files/migration/ng/Assessing-the-Impact-of-Conflict-on-Development-in-NE-Nigeria---The-Report.pdf

[2] Rebuilding the financial building blocks for the excluded in North East Nigeria: The Riby Initiative, (2021, December 23). Guardian Nigeria. https://guardian.ng/features/rebuilding-the-financial-building-blocks-for-the-excluded-in-north-east-nigeria-the-riby-initiative/

[3] Ksoll, Christopher & Lilleør, Helene Bie & Lønborg, Jonas Helth & Rasmussen, Ole Dahl, (2016). Impact of Village Savings and Loan Associations: Evidence from a cluster randomized trial. Journal Development Economics, Elsevier, vol. 120(C), pages 70-85. https://doi.org/10.1016/j.jdeveco.2015.12.003 

[4] https://drive.google.com/file/d/1vOhuZTjKbmaxFB_OZw_MC8ue8WtG7aJU/view?usp=sharing

[5] Nigeria. Mercy Corps. (2020, August 31). https://www.mercycorps.org/where-we-work/nigeria

Notes

The first version of this case entry was written by Afolabi Salami, a Master of Public Service candidate at the University of Arkansas Clinton School of Public Service, and then edited. The views expressed in the entry are those of the authors, editors, or cited sources, and are not necessarily those of the University of Arkansas Clinton School of Public Service.