Photo/PACIDA: Halima Adan standing in front of her provision shop. She was given a business starter kit of Ksh.15, 000 from PACIDA through Kinisa Village Savings and Loans Association (VSLA) which she used to start her business.

How Village Savings and Loans Concept is transforming businesses in Marsabit, Kenya

Standing in front of her small mud retail-shop, Halima Adan, stares at her grandchildren play hide-and-seek, there are usually not many customers visiting her shop at this time of the day, so she takes time to engage with the kids.

Life took a new turn for Halima, 50 years old-widow residing in Kinisa Village in the north eastern county of Marsabit, when she was given a business starter kit worth Ksh.15, 000 by Pastoralist Community Initiative and Development Assistance (PACIDA). She then took a loan of Ksh. 15,000 from Kinisa Village Savings and Loans Association (VSLA) to supplement her starter kit, and she started a provision shop.

“Prior to venturing into the retail shop business, my only source of income was selling goat milk,” she says. “The income was hardly enough to buy food for the family, pay school fees for the children and cater for other basic needs, at the end of every year, I was deep in debt due to the money I borrowed from people.”

Halima was introduced to the VSLA under a program dabbed ‘Strengthening Resilience of Agro-Pastoralists’ Livelihood in Eastern Africa’ implemented by PACIDA, and co-funded by German Cooperation (BMZ) and Welt Hunger Hillfe (WHH). Through the program, PACIDA provides a business starter kit to members of VSLA groups to supplement their loans and enable them actualize their business ideas.

She saw an opportunity to improve her entrepreneurial skills and transform her family’s lives. After months of occasional training on savings, business skills and livestock management, she put the new acquired knowledge into practice.

“I used the Ksh. 15,000 loan from my VSLA group to buy stock; mostly food staff to sale to my neighbors” she says, adding that she was able to repay the loan within five months.

Halimas’ success illuminates the opportunity that microfinance schemes have provided to several people in Moyale, especially those who are members of the VSAL groups. Hers’ is a testament that access to money, financial literacy and business skills to the vulnerable communities can give them an opportunity to earn more, do more, and live better.

VSLA boosting business

Hussein Mohamed, the chairman of Funanyatta VSLA group knows too well how the scheme has enabled him do more by enhancing his livestock business. “My whole life has changed since I joined the group, you can see how I’m looking.” He says, while smiling and showing pictures on his phone of the goats he had just sold the previous day.

Hussein took a loan of KSH. 30,000 in May, 2019 from Funanyatta VSLA group to boost his business of selling goats. He then received the business starter kit from PACIDA and used the cash to increase his stock, by buying small goats at Ksh.2000 each, breeding the goats and selling each goat at Ksh. 5000, making a profit of Ksh.3000 per goat. Currently he has 45 goats which he hopes to sell, and savings of Ksh. 75,000.

Photo/PACIDA: Abshiro in her shop showing some of the textile she bought with the Ksh. 15 000 loan she took from her Village Savings and Loans Association (VSLA).

Adjacent to Hussein’s village on Marsabit-Moyale highway, one can’t help but notice Abshiro Hussein’s new textile shop.  Through the VSLA loan, Abshiro, 28 can now support her husband’s income. “My husband is a herder, he doesn’t earn much,” said the mother of four kids, “I used the Ksh. 15,000 loan from the scheme to buy stock of textile and baby clothes to re-sell in my shop, from the sales, I made a profit of Ksh. 10,000 and I have settled part of the loan. Business is progressing well, and I feel rely proud that I can now supplement my husband’s income.”


The VSLAs helps to reduce poverty level by financially empowering vulnerable communities to diversify their incomes through offering loans. As such, making funds available to invest in starting or improving small businesses.

Most VSLAs are made up of 15 to 25 members, who hold regular meetings to record transactions. Just like Halimas’ Kinisa VSLA, each member saves a minimum amount of money monthly, out of the total savings, an agreed percentage is allocated for social fund that supports members in need.

“VSLA models are designed to allow members have a safe place to save their money, access loans and obtain emergency insurance.” Says Samuel Lentoror, Program Manager at PACIDA. “Besides, the management of the scheme is entirely based on members”

According to Ibrahim Abdi, a group coach from Funanyatta who is responsible for training the VSLA groups in Moyale, the initiative has provided an opportunity for livelihood diversification in an area synonymous with livestock keeping only. “I have seen many members venture into small business, and most of them are doing fairly well,” he says, “the groups are forever grateful to PACIDA for introducing the Village Savings and Loans Association and providing the business starter kits to support group members with business ideas.”