Village Savings and Loan Associations (VSLAs) in Africa are community-based financial groups designed to offer savings, loans, and financial security to rural populations, particularly in areas with limited access to formal banking. These schemes are often formed around tight-knit groups of individuals, pooling resources to provide small loans to members and creating a safety net for emergencies. In the context of conservation, VSLAs have gained recognition for their role in promoting sustainable environmental practices. By empowering local communities with financial independence, they help reduce reliance on unsustainable natural resource use and provide alternative livelihoods that support conservation efforts. These initiatives foster economic resilience while encouraging environmental stewardship, as communities are more likely to protect their surrounding ecosystems when they have viable economic alternatives.

CORDIO has steered the formation of 7 such borrowing and lending schemes in Kenya, leveraging local community interest and participation in mangrove, fisheries and sea grass conservation to formalize such groups and introduce VSLAs as a tool for sustainable conservation finance. To date, more than 120 coastal community members have been engaged in the ‘’table’’ banking scheme, with all transactions manually recorded in physical ledgers. However, the reliance on cash transactions—both for withdrawing and depositing money—along with the use of physical accounting systems, has raised some challenges since the initiative was rolled out. Notably, the handling of large volumes of cash increases the risks of theft, mismanagement, loss, or errors in record-keeping. Additionally, manual accounting systems can be prone to inaccuracies and delays, making it difficult to track financial flows in real-time. Physical ledgers are also prone to damage or loss, e.g. from natural calamities or mishandling, leaving a trove of crucial information susceptible to irretrievable loss. In order to adequately realize the sustainable conservation financing goals of such exercises, more efficient, transparent, and secure digital VSLA systems are, therefore, called upon.

Through funding from the European Union and United Nations Environment Programme, CORDIO is piloting a digital fintech solution to replace the traditional VSLA model. Co-developed by CORDIO and VUA, the dynamic mobile-based application will see users make withdrawals and deposits via money transfer service, MPESA, with all relevant accounting information captured automatically in the background. By entering simple four-digit USSD codes and following resultant prompts, every participant in the pilot will be able to access their transaction history, borrow loans or make savings deposits round the clock, and review any fines or interest accruals. For CORDIO, the digital solution presents an opportunity to receive detailed reports and analytics, a factor crucial for assessing the merits of the scheme for conservation and local financial empowerment.

The pilot group comprises of 30 fishermen and women fish mongers from Mkunguni in Kwale County, Kenya, who have already demonstrated their commitment to conservation through the adoption of sustainable fishing practices. Our hope is that this upgrade to their traditional borrowing and savings scheme can enhance their ability to independently sustain their conservation engagements, foster their wider financial literacy and empowerment, and pave the way for the implementation of the program among other coastal community conservation groups.