Saving for Stability

I am Ayham Taha, Livelihoods and Economic Recovery Program Manager at CARE Turkey, and a Syrian economist and market analyst. I graduated from Aleppo University in Syria and started my professional career in accounting and banking. When the crisis began to devastate my country, my city and my family, I had to do something. I started working with Syrian Arab Red Crescent in 2011, providing first aid to civilians injured by shelling and air strikes in intense areas. Two years later I left the country to avoid mandatory military service. By 2013 I was working with humanitarian actors, including International Rescue Committee and CARE, in Turkey. I have spent seven years supporting programs to build economic empowerment for Syrian refugees in Turkey and northern Syria. I am also studying the political economy and plan to further study how to conduct peace building and economic recovery.

After years of conflict, families in Northwest Syria are living without formal governance institutions, banking systems, and a lack of social safety nets. Access to financial resources, like cash or loans, have largely disappeared; leaving war torn households with few options to rebuild their lives, homes, businesses or to improve their everyday living conditions.

The Saving for Stability project will establish 30 local savings and loan associations, or VSLAs, with 500 new members each year in conflict-affected communities of Northwest Syria. A Village Savings and Loan Association (VSLA) is a group of 15-25 people (often women) who save together and take small, low interest loans.

VSLAs elevate humanity by building financial resources and resiliency, creating networks of trust and pursuing shared ambitions. Evidence from decades of implementation at CARE shows that VSLAs reach far beyond economic empowerment, leading to land ownership, running for political office, and fighting for gender equality.

After more than nine years of civil conflict, the Syrian government has extended control over much of the country. Yet, recent events, from withdrawal of U.S. troops, renewed attaches by Islamic State forces, to the first cases of COVID-19, have created renewed uncertainty for the people of Syria. As of January 2019, more than 5.6 million Syrians were registered as refugees in neighboring countries and half of all Syrians remaining in country are displaced, and more than 13 million people need humanitarian assistance inside Syria. This is the world’s largest displacement crisis.

When one is displaced from their home and community, they often lose access to their productive assets, such as shops, jobs, livestock and professional networks. Many families have exhausted savings and struggle to earn a living. As aid is reduced with shifting international priorities, such as COVID-19, households adopt extreme coping strategies to pay for food, health needs and education, such as selling productive assets, engaging in armed groups or high-risk jobs (smuggling).

The COVID crisis threatens catastrophic consequences as border crossings used for humanitarian aid are potentially closing and internally displaced people have limited access to water and sanitation and weak health systems are already overburdened.

A Village Savings and Loan Association (VSLA) is a group of individuals putting their savings together to give themselves access to capital/loans from the group’s savings. Members in a VSLA save through the purchase of shares—one to five shares every meeting. The share value is decided by the members and documented in their constitution when the group is formed.

The loan fund is comprised of share money and loan profits from interest. All the members have the right to borrow up to three times the value of their shares. Each meeting, members may take loans and make loan and interest payments. Any remaining interest is distributed to all group members after a lending cycle (9-12 months). The group’s social fund helps cover unexpected financial emergencies, like funeral expenses which can wipe out a family’s financial reserves. 

Saving for Stability will build on a pilot I conducted in Northern Syria in 2017, which demonstrated the viability of the model in a humanitarian context, to establish 30 VSLAs each year among the displaced population in Northwest Syria to increase resilience to economic shocks through emergency funds and build household and community strength to build assets long-term as they rebuild their lives.

The communities proposed for participation in Saving for Stability are in rural Aleppo and Idleb governorates. They have been devastated by the conflict and have lost access to stable income, are unable to rebuild their shelter, access education, invest in agriculture or livestock, nor participate in capacity building programs such as apprenticeships. Potential participants are farmers, livestock herders, and small business owners who are seeking access to capital or productive assets.

Syrians are known as productive and self-dependent people, which was clearly reflected in low unemployment rates prior to the crisis. VSLAs preserve the dignity of beneficiaries since participation is voluntary and group members have the power to decide on priorities, how to spend the money or how much to save. Savings groups serve all community members including the most vulnerable and marginalized individuals and have direct and indirect beneficiaries such as workers in new businesses created with a VLSA loan or family members.

Establishing these associations will increase access to capital/loans to address basic needs including food and household expenses, education, businesses, health, or paying off debt. This platform will also enhance social networking to increase community cohesion and reduce dependency on aid.

Women and girls are disproportionately affected in humanitarian crises and traditionally have fewer resources and less influence over how resources are allocated. VSLAs offer the opportunity to women access financial and business capital and provides a sense of community, solidarity and collective empowerment. Women who have joined VSLAs have become business owners, community leaders, pioneers in ending child marriage in their communities, and even elected officials. The VSLA is the foundation on which women, people with disabilities, and other marginalized groups have found their voice and the means to fulfill their dreams.

Since its inception in 1991, CARE’s promotion of the VSLA model has formed a constellation of 330,000 groups representing over 8 million members – over 80% of whom are women. CARE globally is adapting the traditional VSLA model to humanitarian contexts. Initial results show that VSLAs provide much-needed resources in crisis settings. In the Democratic Republic of Congo, CARE established VSLA groups to boost the impact of community-driven reconstruction programs. Five years later, family income has risen by 200%, and there are remarkable improvements in reduced domestic violence, increased school attendance and social cohesion. In Sudan, one community suffered fire damage to 95 homes in 2015. VSLA members supported affected neighbors with cash from the social fund and in-kind support through labor, which contributed to peaceful co-existence and built trust among villagers and different tribes.

CARE Turkey saw an opportunity to apply the model to the Syrian context and brought me on to kick-off the pilot in 2017. We established 30 groups and 500 members completing a full 9-month saving and lending cycle. Unfortunately, we lost access to the area so we can no longer track these groups. Saving for Stability will be conducted in new, more accessible areas.

I strongly believe in strengthening the social relation and dependency in communities as they recover from the conflict in Syria. Greater interdependency and trust will facilitate growth of the whole community, foster reliance on one another’s strengths and increase their personal profit instead of depending on aid or government support to survive.

For example, I believe VSLAs will increase local production efficiency. I would encourage wheat or olive farmers to save together to purchase the required harvesting machinery which will help them to mitigate the market monopoly. Also grouping farmers will give them better access to inputs from wholesale service providers for better prices that increase their profit margin. Selling product as a group will also attract large scale suppliers.

Local development entities, like a VSLA, are the first step toward sustainability. Emergency humanitarian actors can only reach so far and are limited in the support they can provide, but evidence shows that VSLA groups are first to respond when crisis hits, they often self-replicate, and require very limited oversight from CARE after setup. Syrians are strong, self-reliant people, and the VSLA model will give them a mechanism to support one another as they rebuild with dignity.

In addition to my role at CARE, I am acting as market analyst for different NGO working groups and clusters. I can see clearly the available resources and capacities on the local level and identify opportunities to group resources to reset the economy on local scale to contribute to the national scale later. I am familiar with different cultures in Syria due to my role for the past ten years responding in different locations and groups of affected beneficiaries. I have established a solid understanding on how things could be done and when. For example, I am familiar with agriculture seasonality, skill gaps in certain markets, common challenges to enter markets, ethnicities and tribes of each geographic location.

Having been a part of the VSLA pilot in Syria since 2017, our lessons learned, including failed attempts, have provided great knowledge for me to use when delivering this project and we will continue learning to adjust future programming. On the field level, considering the absence of banks and micro-finance entities, local communities have welcomed the concept. They need financial solutions and appreciate innovative ideas with no high expenses such as interest or fees. CARE is one of the largest humanitarian organizations working in Northwest Syria and is well positioned to implement this project with more than 5 years of experience delivering programming in this area. 

A key challenge we face in economic recovery programs is funders are mostly interested in providing for urgent needs, such as access to food and water. Yet, local communities need interventions to rebuild the economy such as electricity, fuel, rehabilitating irrigation systems, construction of health facilities and schools. To shed light on this need, my team and I conducted a value chain analysis on wheat, a strategic marketable crop in Syria. We found that farmers are struggling to market their harvest because the government, which is now unstable, used to purchase all wheat at a fixed price. With the market analysis documentation, we secured funding from several donors to support the wheat value chain at different phases:  Donor “A” supported purchasing inputs for multiple years, while Donor “B” provided subsidized bread through supporting local bakeries with flour.

I was shocked to learn from the market analysis that although before the war, Syria was producing more than twice the annual nation-wide consumption of wheat and exporting 50%, now Syria is importing wheat and flour from Ukraine and Russia. These conclusions informed modifications to existing programs to prioritize purchasing wheat locally and having it processed locally, effectively creating a new market linkage. 

In my work at CARE we aim for women's economic empowerment by challenging norms and cultural understanding that prevent women from accessing productive assets or markets. In the beginning, it was a challenge even to recruit female field staff, but after trainings and focused discussion with local market actors, we identified acceptable market entry points for women. Now we have equal numbers of female and male field staff, giving us increased access to and a better understanding of women's needs and barriers to sustainable income generating opportunities.

Today, women are prioritized in all the Livelihoods programs that I support. We facilitate discussions with local communities (men, women and community leaders) to address social barriers to women’s inclusion; distributed hundreds of livestock to women farmers; thousands of female trainees participated in vocational trainings and found jobs or started small businesses; dozens of business grants were distributed to women equally or even exceeding numbers of male participants.

I consider this the most important achievement I have ever reached with my team and my respected partners; and am aiming toward more progress offering women safe access to markets and equal opportunities, including 50% female participation in the Saving for Stability project. 

A VSLA is an innovative solution as it solves several challenges at once with minimum inputs and involvement from those external to the group:

As VSLAs are increasingly implemented in humanitarian and emergency settings, Saving for Stability will address the unique needs of internally displaced people and their host communities – both of whom need access to critical financial resources to recover from the devastation of the conflict. A VSLA acts as a “first responder” when a crisis strikes, and families and communities will be better able to withstand economic shocks. Further, the social cohesion built within a VSLA will build trust and communication between host communities and those displaced among them, which is a known point of tension.

Participants in Saving for Stability will be trained to invest their savings in funding a new project such as a livestock farm, collective agriculture machinery ownership, or food processing. This investment will bring back profit on top of their savings. A comprehensive training schedule will be developed and delivered based on a needs assessment and capacity analysis to improve individuals’ capabilities in technical and soft skills.

The Saving for Stability project is modeled on CARE’s global VSLA strategy and the theory of change is as follows. If CARE builds agency by establishing high-quality community-level gender sensitive savings groups; and empowers relationships with market actors, such as the private and public sectors; and engages with and influences institutions and powerholders to build more equitable and empowering institutions, policies and social norms; then by 2023 at least 9,000 men, women and children, including people with disabilities and women headed households, in Northwest Syria will have increased economic and social power to reduce poverty and increased ability to withstand and recover from past and future economic and social shocks.

A more detailed monitoring and evaluation plan will be developed once this project is funded. 

Presently, we have more than 500 participants throughout the established 30 groups inside Syria. We are planning to establish 10 additional groups (150 participants) during 2020.

Through Saving for Stability we plan to add 30 groups and 500 group members per year. Each group member is estimated to have 6 family members, which is the average for the Syrian population. Cumulative target reach numbers are as follows:

Year 1: 30 groups, 500 direct participants, plus indirect totals 3,000 people reached

Year 2: 60 groups, 1,000 direct participants, plus indirect totals 6,000 people reached

Year 3: 90 groups, 1,500 direct participants, plus indirect totals 9,000 people reached

Over the three-year period we will monitor the replication rate and anticipate each group to replicate at least once, meaning this number could be doubled each year. We will know more once we get the project underway, but the potential reach is immense.

By 5 years, it is reasonable to expect that our reach will exceed 20,000.

Based on evidence from other counties, for each VSLA group established by a VSLA program, at least one more group forms on its own. This occurs through adding members and breaking out into two groups or members moving to new locations and starting new groups or telling friends and family about how to start a group. When looking at this multiplier effect of a VSLA, it can even be hard to track just how many people will eventually have benefited from the project.

One person, or a whole team, cannot achieve systemic change, but a model like the VSLA, which becomes its own movement, can achieve large-scale systemic change. That is our goal – that we would be the seed that would launch VSLAs across Syria – so many that we can’t track them all.

Saving for Stability will undertake several initiatives to maximize the impact, replication rate and reach of the VSLAs started by CARE. We will support and facilitate linkages between different VSLA groups to form federations to exchange larger loans, savings, and engage in partnership for certain projects. We will group farmers and facilitate and support access to the agriculture market. We will conduct comprehensive training to improve capabilities in technical and soft skills on combining savings for new collective projects, such group purchase of livestock farms, machinery or food processing. We will also take extra measures to ensure women are engaged in leadership opportunities and decision making in their communities. 

Barriers to implementing Saving for Stability include:

1. Gaining a clear understanding of the targeted groups is difficult with limited staff and partners on the ground to build relationships with community leaders.
2. Northwest Syria is still a conflict zone, with that comes additional need, context fluidity, reduced access, increased security needs, and limited resources.
3. VSLA implementation is a challenge because it has no inputs (from CARE) to be distributed to participants as other programs often do. These inputs can be an incentive for participation. With little to offer aside from knowledge and likelihood of future access to capital we may have limited interest, engagement and in turn, savings, may be limited at the outset.
4. Engaging women and offer them an equal opportunity will be a challenge due to existing social norms and traditional mindsets that men should lead and have power over finances and decisions.

The barriers mentioned above will be addressed as follows:

1. CARE Turkey will seek out additional local implementing partners in areas where we have little insight into the culture and norms. With nine years of experience delivering programs in Syria, CARE has established a strong reputation and can seek the out the appropriate partners for this effort.
2. To manage the fluid context of a conflict setting, CARE will closely monitor the situation on the ground where we will work and conduct thorough scenario planning as we do in other areas of Syria which allows for contingency plans for emergencies which might affect the VSLA programs.
3. To address the challenge of limited inputs, we will look for serious and committed participants to run the first cohort and trust that the groups’ achievements will attract other individuals. While individual savings might be limited at the outset, we know that VSLAs grow their savings over time, sometimes slowly, along with the solidarity and trust between different group members. The initial group of participants will train and support new groups.
4. To overcome the challenge of engaging women, we will get all community members engaged to share the understanding that this established space is safe and would have a positive impact on their household. This approach worked well in the pilot, and I witnessed women in a leadership role for one of the groups which consisted of both male and females participants.

CARE's global team of experts will assist our project whenever needed. 

We currently do not have partners inside Syria which can effectively support this project. 

CARE has a business model for the global VSLA approach, but for Syria the context is highly complicated and we have yet to develop a specific business model.

As a non-profit organization, this project is run through philanthropic capital. CARE International is committed to expanding its footprint in the Middle East and North Africa region, including fundraising for and a focus on VSLAs in Emergencies. As funding is secured, projects like this one in Syria will be launched and resourced to scale up.

For the first phase, we received a donation from the EU 75,000 Euro (84,712 USD) to establish 30 groups and for the next phase, which we are currently implementing, we received 20,000 USD from Syria Resilience Consortium to establish 10 groups.

We pursue philanthropic funding through grants and donations as often as opportunities come our way. We are networked with a global team of fundraisers who seek to connect funders with our work. The MIT Elevate Prize will help us with gain more visibility and we are hopeful that additional funding can be sourced through networking in the prize program.

If Saving for Stability kicks off in October 2020, we would anticipate about $30,000 in expenses through December 2020.

With funding of $300,000 we will cover the following costs over two years:

• Staffing – project manager, assistant, field agents
• Office Support – finance, procurement, program quality, safety, advisors
• Travel and Transportation – vehicle, flights, per diem
• Equipment – laptop, cell phones
• Activities Costs – assessments, trainings, printing of materials, VSLA kits, digital systems

I am applying to the Elevate Prize for a few reasons:

1. The Elevate Prize values innovation and the Saving for Stability project is innovative for an emergency setting.
2. I have had difficulty gaining traction with donors on this project since it focuses on rebuilding and sustainability rather than meeting the urgent basic needs of the affected population.
3. I believe that the Elevate Prize would help kick-start this effort in Syria and due to the multiplier effect of the VSLAs, CARE's experience with VSLAs worldwide, and the fortitude of the Syrian people, the effort is sure to succeed - building more resilient communities, a more resilient nation and the ability to build a better future for present and future generations in Syria.
4. The prize funds will help cover the gap of documenting lessons learned from VSLAs in emergency settings to be shared within the CARE confederation and externally with peer organizations to improve quality and overcome anticipated challenges of financial inclusion in complex settings.

Access to funders and media exposure would be very welcome. 

I would like to engage a software organization, such as Chomoka Tanzania or VSL Associates “Savix” to leverage technology and further the potential of the VSLAs. CARE is the first NGO in Syria delivering the VSLA. We have yet to determine any potential partners in Syria for this effort, but a partner will be selected to digitize information we collect through program quality efforts.