Cooperatives: Drivers of financial and social change in Mali

Sikasso, Mali (ILO News) - The intervention carried out in Sikasso, as part of the ACCEL Africa project, introduced two innovative approaches to strengthen the financial stability of cooperative members and contribute to the elimination of child labour:

• Training and supporting members in financial management.
• Encouraging collective savings and risk pooling.

These new practices could transform cooperatives into real levers of financial inclusion, secure producers' incomes, and help combat child labour.

Training and support in financial management: A key factor for producers’ resilience

One of the major challenges identified during consultations with cooperative members at the start of the project's second phase was the lack of financial management skills. This weakens resource planning and increases household vulnerability.

The financial education training in Sikasso highlighted several concerning financial practices:

• Workers have many projects and ambitions but struggle to articulate them clearly and lack the tools to turn ideas into reality.
• Few producers maintain a written budget, relying instead on an informal and unstructured approach to managing their finances.
• Many do not clearly differentiate between essential expenses and desires, leading to poor resource prioritization.
• The habit of recording expenses and planning income is almost nonexistent, preventing any medium- or long-term financial projection.

Why Is This Important?

Without mastering basic financial management skills, producers remain trapped in a cycle of economic instability. Debt and reliance on child labour often become coping strategies in times of financial difficulty.

The Initiative Implemented:

• Development of tailored training to help participants create a budget, optimize expenses, and set realistic financial goals.
• Integration of awareness messages on the links between poor financial management and increased risk of child labour.
• Creation of a network of change agents within cooperatives to support members after training and ensure knowledge application.
• Introduction of practical tools: expense tracking booklets, simplified budget sheets, and action plans to structure financial management.

Expected Impact:

• More autonomous cooperatives capable of managing their collective resources more effectively.
• Better anticipation of financial shortages through effective planning.
• Reduced reliance on credit and lower risk of over-indebtedness through proactive resource management.
• Decrease in child labour due to improved household income management.

Encouraging collective savings and risk pooling: A new approach to stabilizing producers' incomes

While cooperatives already facilitate access to credit, collective savings remain underdeveloped in the cotton and gold mining sectors. However, establishing collective savings mechanisms and risk management strategies could significantly enhance the financial stability of cooperative members.

Observations from the Training in Sikasso:

• Producers typically spend their income immediately, without setting aside funds for unexpected situations.
• Individual saving is rare, often perceived as inaccessible or not a priority.
• The concept of community emergency funds is new but generated strong interest among participants.

Ongoing Initiatives:

• Creation of savings groups within cooperatives, based on the Village Savings and Loan Associations (VSLA) model, allowing members to save collectively and access low-cost internal loans.
• Establishment of cooperative emergency funds, financed by member contributions, to provide financial reserves in case of hardships (poor harvests, work-related incidents, equipment repairs).
• Use of local financial institutions to secure savings funds and structure their use, ensuring accessibility and protection against loss.
• Integration of an insurance component: saved funds could be used to finance agricultural insurance premiums, production equipment, and income-generating activities at a collective level.

Expected Impact:

• Greater resilience to economic shocks (fluctuations in cotton and gold prices, financial shortages).
• Reduced reliance on costly credit, promoting self-financing of producers’ needs.
• Increased trust among members in collective resource management and improved transparency within cooperatives.
• An alternative to child labour by ensuring better household income management and planning for children’s educational and health needs.

The experience in Sikasso demonstrates that agricultural and mining cooperatives have the potential to become powerful tools for financial inclusion and key players in the fight against child labour. By structuring financial management among their members and developing collective savings mechanisms, cooperatives can secure producers’ incomes, reduce dependence on credit, and provide viable alternatives to child labour.

With proper support and practical tools, these new practices could gradually be integrated into cooperatives across the country, contributing to broader and more sustainable financial inclusion.