Community Ownership Dynamics of Village Savings and Loan Associations (Vsla) and their Contribution to Reducing Rural Poverty in the Municipality of Dangbo, Benin.

ABSTRACT Village Savings and Loan Associations (VSLAs) have become an important community-based mechanism for poverty reduction in rural Benin. Despite the withdrawal of technical and financial partners, the expansion of formal microfinance institutions, and microfinance regulations, these associations continue to thrive. This study examines the socio-economic and organizational foundations of community ownership of VSLAs by women’s groups in Dangbo and explores implications for financial inclusion policies. The study adopted an empirical approach combining quantitative and qualitative methods. Field surveys were conducted with 187 VSLA members and key stakeholders involved in community development and financial inclusion. Data were analyzed through descriptive statistics and content analysis to identify the institutional, social, and economic factors underpinning VSLA sustainability. Findings indicate that strong community ownership of VSLAs is rooted in organizational and functional mechanisms based on proximity networks, social cohesion, and mechanical solidarity. Their resilience derives from shared values including solidarity, inclusion, trust, and collective responsibility among socially homogeneous members. VSLAs function as spaces for co-production, mutual support, and wealth redistribution, reinforcing social and economic resilience. These characteristics enable them to remain attractive and sustainable despite competition from formal financial services and evolving regulatory frameworks. The study highlights VSLAs as socially embedded institutions that provide an effective alternative for poverty reduction and social inclusion. Their success challenges formal microfinance models and public financial inclusion strategies to build legitimacy by recognizing and integrating community-based achievements. Strengthening complementarities between formal institutions and VSLAs could enhance financial inclusion.