Using VSLA to Improve Livelihood Outcomes for Cape Three Points Forest Fringe Communities

 Ahotor VSLA in session © Hen Mpoano

- By Hen Mpoano


The Cape Three Points Forest reserve has been recognized as a Globally Significant Biodiversity Area (GSBA) and an Important Bird Area (IBA) because of its exceptionally high level of biological diversity. Despite this high biological diversity, however, the ecological integrity of the only coastal forest in Ghana is increasingly threatened by human activities. Over the past 2 years, Hen Mpoano has been working with communities fringing the Cape Three Points Forest Reserve (CTPFR) and other key stakeholders to protect the integrity of the remaining coastal forest in Ghana.

The Enhancing Participatory Planning and Management of Cape Three Points Key Biodiversity Area, is a two year project funded by Critical Ecosystem Partnership Fund (CEPF) Guinean Forests of West Africa Biodiversity Hotspot Small Grants Mechanism and managed by BirdLife International. Implemented between 2018 and 2020, the project aimed at empowering the Cape Three Points Community Resource Management Area (CREMA) and to incorporate the ecological connectivity between CTPFR and adjoining coastal wetland and mangrove forests into Municipal level land use policies, planning and decision-making processes. Specifically, the project sought to enhance stakeholder collaboration and inclusive planning processes for CTPFR and linked ecosystems: to strengthen local institutions for forest protection and management; and to pilot ecosystem-based livelihood innovations in target communities.

To incentivize forest conservation by local communities, the project introduced livelihood innovations, key among which was Village Savings and Loans Associations (VSLA). VSLA is a group of people who collectively support a structured process for saving money and offering loans at the local level. The VSLAs bring together community members who save for mutually agreeable objectives and take out small loans from those savings to expand their businesses, pay for their children’s school fees and support household activities.

 Hen Mpoano Staff providing instructions to members of the Ahotor VSLA in Ketakor © Hen Mpoano


A major objective for establishing VSLAs was to support local economic development through financial intermediation. The VSLA concept has been applied by Hen Mpoano in the rural settings to organize and empower community members to build cohesion for managing their natural resources and also to generate self-funding for livelihood initiatives. VSLAs have proven to be an effective tool for reducing pressure on natural resources and mobilizing the communities to support the conservation effort. They are also effective for empowering women in the rural areas.

In all 5 VSLAs were formed in 2 forest fringe communities to help diversify livelihood activities of local people who depend mostly on farming and the exploitation of natural resources, including mangroves.

The Ahotor VSLA group at Ketakor in the Ahanta West Municipal is one of the VSLA groups facilitated by the project. The group comprises 30 members (28 women and 2 men). Hen Mpoano provided the group with full training, start-up input including a cash box, savings pass books, and other stationery materials. The group was also monitored regularly during the first saving cycle to ensure strict adherence to their constitution.

In July, 2020, the small community of about 35 houses shared out their loan fund after one complete cycle lasting 12 months. With a share-value of one Ghana Cedi (GHC 1.00) which is about 17 cents, the group shared-out a total of GHS 7,650.00 (US$ 1,321.24). The highest contributor of the group received GHC 286.00 (US$ 50.00). Members invested their savings into their businesses and food crop farms. Others used the money to take care of children school fees among other needs.

Mr. Joseph W. Baidoo invested his savings to expand his family bakery business. He is very excited to be part of the VSLA group. As he puts it:

The VSLA really came at the right time. I used my money to bring back life into our dying family bakery. Everybody is happy. We have even agreed to double our share value. People who were reluctant initially have expressed interest to join.”

Few months into the first cycle another group was formed in the same community due to the overwhelming interest of community members. The Ahotor VSLA group used part of their social fund to acquire the start-up materials.

Once forest dependent communities are empowered financially, it reduces natural resource dependence and associated pressures that drive degradation. The VSLA groups in the fringing communities of the CTPFR have proven this hypothesis. To sustain the groundswell and the successes chalked in these communities, the capacities of selected Village agents have been enhanced through practical training to continue to monitor the VSLAs beyond the life of project and also to be able to form new ones when the need arises. Ketakor is already in the process of forming their third group with the supervision of the Village agents.

Mr. Justice Camillus Mensah, the Project Coordinator was satisfied the result of the financial empowerment in the small community of Ketakor. He had this to say;

“Sustainable forest conservation efforts do not depend only on the commitment of the local people. In the midst of poverty and deprivation, conservation efforts must also be supported by financial initiatives that give them options in livelihood ventures, hence the introduction of the VSLA concept in the forest fringe communities. It is, therefore, very fulfilling to see the impact this has made in the lives of the people we work with”.