Salamatu is 19 years old and sells rice in the local market on the roadside close to where she lives in Freetown, Sierra Leone. Early every morning, she sets up her stall and sits there in the baking sun until 4pm. Then she takes off to work for another three hours – in the classroom of the business school she attends every evening.
“It's not difficult,” she says. “Sometimes I do relax – after work, at the weekend; sometimes I leave my rice with my aunt so I can go somewhere and study. I want to be a big businesswoman someday.”
It was not always so, however. Two years ago, Salamatu was forced to drop out of the business school because she could not afford to pay the tuition fees on her own after the death of her father and brother.
“I had no one to help me,” she explains. “I would help my aunt at the market and she would give me something to eat at the end of the day, but she has several people to provide for.”
Young people in urban Sierra Leone face severe challenges. Lack of skills and a limited formal job market mean that they are often forced to do dangerous and low-paid work. Girls and young women are especially vulnerable to exploitation as bar workers or domestic servants.
One day, Salamatu was approached by one of her friends who told her that there were people coming to help them save money. Plan Sierra Leone and their local field partner, CEFORD were setting up Youth Savings and Loans groups in their community.
It was not long before Salamatu had joined, become the chair of her group, and taken out her first two loans: one to buy a bag of rice to start up her small business and, when the business took off, one to pay for her school fees.
Youth savings and loans
Salamatu is one of 3,258 young people that are participating in Plan’s Youth Savings and Loan programme in Freetown. The microfinance programme kicked off in July 2010 and introduces 15-25 year olds to financial literacy. The groups are designed to be run by the young people themselves with little outside help.
The members organise themselves into a group of up to 20, democratically electing their leaders and deciding on the terms of membership. The group meets weekly and each member uses his or her savings to buy shares in the group’s loan fund. Out of the common pool, members can take out a loan to invest in business, pay school fees or support their families. After four weeks the loans have to be paid back with a small amount of interest.
The system includes the appointment of different positions within the group: the chairperson, the money keeper, two money counters and three key holders for the savings box. These shared responsibilities create trust among the members, and mean that information and knowledge is shared among the group.
Security for the future
Another aspect of the programme is the establishment of a small-scale social security system. Each member of a Savings and Loan group has to contribute to a social fund, which provides financial support to members in emergencies.
Group members are trained in the management of the project so that they will be able to continue without Plan support. Several members have also volunteered as supervisors to help set up more groups in their communities and scale up the project. Salamatu is one of those volunteers.
She says that she is often approached by friends who want to join a group, having seen the benefits that she continues to receive. “I am very happy that I had the opportunity to start something on my own. Now my dream is that someday I will be an international businesswoman”, Salamatu says before she is called into class.
Find out more about Plan's microfinance projects