VAT is an empowerment project in which assets and machinery are acquired and given to marginalized and poor persons on loan basis. They use them to earn and periodically payback in agreed time frames through a telesaving process (telephone money transfers to a central phone number). When payments are complete, the assets become theirs indefinitely

Problem

Many people work hard but save little if any in developing countries like Uganda. They cannot easily accumulate funds to buy assets, machines or other necessary equipment to use. The process of making savings or getting credit itself is complicated by distant banks and paperwork (and is seemingly meant for only literate people). Moreover, mainstream credit/loans have conditions such as collateral security which most of them (especially women and youths) do not posses.

Solution

VAT enables marginalized but yet hardworking persons to acquire capital equipments through an informal loaning process. These include motorcycles and hair cutting machines for youths and women; and agricultural implements such as pumps for irrigation, tractors and grinding machines for peasants. They are also provided with a virtual bank(banking money on a designated phone) through which they pay and save.

Example

A machine is bought and given to a person (or a team), who uses it to earn and pay for it periodically through a telephone money transfer. Part of the amount transferred is a saving for the payee and is paid to them after an agreed time frame for reinvestment.

Marketplace

Savings and credit cooperatives exist and are trying to reach even in rural areas. This means that there is a competition for clients. However, their stringent conditions, bureaucratic behavior and too much formalized paperwork is their undoing. Besides, VET attaches credit to equipment which is used to raise the money to pay it and this is the niche.