Microfinance groups in Mbale Town District

(Village Savings and Loans Associations)


Fundraising Goal : 


Intervention area: Microfinance & Positive Parenting


Situation: Mbale Municipality is characterized by high levels of poverty, poor and illegally constructed housing structures, overcrowding, poor sanitation, and inadequate basic services delivery. Rural to urban migrations is by far the most significant driving force behind rapid urban population growth. Many settled here because of civil unrest, drought, natural disasters such as floods and landslides and in search of employment. This migration has resulted in the fast development of informal settlements as most of the immigrants are poor and cannot afford to live in good quality houses. The high levels of unemployment in the towns further aggravate the problem of informal settlements. These slums are characterized by high rates of poverty coupled by high rates of illicit income generating activities such as prostitution, brewing of illicit alcohol, and child labour. More than 39,000 people are estimated to be living in these slums which occupy more than 335 acres of land, making it almost one-fifth of all town households. 

As for children in Uganda, as much as one quarter of all kids in Uganda can be characterised as living in extreme poverty and therefore experiencing extreme deprivation. The most common deprivations are in the areas of nutrition, health, and access to improved water source. In terms education, secondary school enrollment rates do not even reach 25%. Fees and other school-related expenses tend to be higher for secondary schooling, so poorer families often keep children out of school to work. Quality of education at secondary level is also a major issue, along with lack of infrastructure (such as separate toilets) and other protection, especially for adolescent girls. Furthermore, there is evidence that these deprivations create a ‘vicious circle of poverty’ in which children who suffer deprivations in childhood grow up and become parents who produce children who suffer the same. 


Needs: This part of the population needs to access these resources within their communities as well as receive advice on how to use them efficiently.


Project objectives: Increase the capacity of impoverished rural households to manage their financial resources and withstand shocks to their livelihoods by providing access to basic financial services such as savings and credit, so as to achieve autonomy of these families through a community-managed programme. 


Beneficiaries: Foster families living in the slum areas of Mbale town and living below the poverty line (earning less than $1 a day).


Main activities: 1) To provide microfinance & VSLA training as well as adult learning techniques to the volunteers of our partner organisation ; 2)  To provide the financial resources needed for the development of these VSLAs, such as covering the overall costs of trainings and basic working stationaries, 2) To support the implementation through technical assistance provided by Seeds volunteers.




Working as partners with the Child Restoration Outreach in the Mbale Town District, we wish to create 20 groups, each composed of 25 foster parents, mainly mothers, which, by extent would directly change over 500 individuals' future prospects. With an average household of 6 children in Uganda, this extends to about 3500 indirect beneficiaries, who would benefit through new access to fundamental needs : education, health, food, water. Furthermore, counting on the strict methodology and policies implemented inside the VSLA groups, the programme has prevented bad loan repayment and fostered good governance practices.


The Child Restoration Outreach (CRO): CRO focuses on the implementation of the rights of street children. The organisation has been originally founded in 1992 by a group of committed community leaders who were concerned about the growing number of street children and their alarming situation in Mbale town. CRO assists children to get rehabilitated, educated and reintegrated within their family members as a long-term strategy. They aim at empowering street children through the provision of educational structures and run programs which provide health and nutrition services.

Budget: 5.345€ would be necessary for the formation, training, monitoring of 20 groups as well as for the training of 2 local volunteers now qualified for any VSLA trainings.