Toddler takes first steps in finance

Paulo's savings will help pay for his schooling and future healthcare

11 April 2008: A Tanzanian toddler found abandoned on a stranger’s doorstep is taking his first steps towards a secure financial future with help from Plan.

Little Paulo’s chances of survival were low when he was first discovered wrapped in just a polythene bag. Paulo was taken in by Lucia, the woman whose house he had been left at, and he is now a thriving toddler - but with a difference.

For this is a toddler with his own savings account – in an area where banks don’t have clients due to their low incomes and lack of economic activity.

Plan's help

Plan has set up a scheme called the Village Savings and Loans Associations (VSLA) where communities set up their own savings groups, acting like miniature banks.

Thanks to this initiative, Paulo now has his own pool of money from which he can pay towards his future, such as covering the cost of schooling and health care.

Saving for the future

In February last year, Lucia, who has her own vegetable stall, discovered that the VSLA scheme would let her have her own savings – something she has never been able to have before. Immediately Lucia saw an opportunity for Paulo as well.

“I wanted so much to save for Paulo’s future,” said Lucia. “So I registered him. Paulo is the member, not me, and this helps me to focus on how useful saving up for him will be.”

Lucia saves around 2,500 Tanzanian shillings a week (around £1.70 or US$2.13) which goes to her village’s savings group. All the members save their own amounts and contribute to the pool of money on a weekly basis, with records of every entry kept.

Taking control

The group then uses the members’ pool of money to give out loans with a payback interest of 10% a month – high, but manageable due to the small amounts involved.

These loans are usually for healthcare, setting up businesses, and emergencies – giving people a chance to take control of their own lives.

“I took a loan out and expanded my small vegetable stall business as well and now Paulo can go to school, have healthcare and enjoy his future, ” said Lucia.

Learn more about Plan’s approach to supporting children and communities.