CARE's SIMBA programme, which targets vulnerable households affected by HIV/AIDS in Zimbabwe, works with AIDS Service Organizations (ASOs) to deliver microfinance services and micro-enterprise training. The ASOs help in the formation of groups that start by building up a savings fund and then make small loans from this fund to group members for business and emergency needs. The self-managed, savings-based approach has been important for clients building up assets in preparation for a time of sickness, and in supporting clients who might otherwise be excluded from a mainstream microfinance institution.
For Africa's poorest and most marginalized households, few financial institutions exist to serve them, and where institutions do exist they generally have inappropriate products and services. To address the issue of financial inclusion and reach poorer clients, CARE began promoting a savings-led microfinance model, called Village Savings and Loans Associations (VSLAs). The VSLA model is based on the belief that for the extremely poor, particularly women, the best approach is to begin by building their financial assets and skills through savings rather than debt. Through participation in a VSLA members can diversify their activities, plant additional crops and even add new income-generating activities. At the same time, they are able to save and borrow in ways that allow them to smooth cyclical household consumption patterns. Now more than ever before, we see VSLAs as an important, and often necessary, rung on the ladder of financial inclusion.