On the Bonthe Sherbro River estuary of Sierra Leone, the air is filled with the scent of saltwater, fish, and woodsmoke. For the people who live here, daily life revolves around the rhythms of the estuary, and many have built their livelihoods around the resources of the sea and land. However, intensive harvesting of mangrove forests has increasingly put this way of life at risk as biodiversity declines and coastal erosion accelerates.
Mangroves are coastal trees and shrubs that sequester up to four times as much carbon as tropical forests, prevent coastal erosion, and protect biodiversity – all of which makes them critical to both global climate goals and local livelihoods. But for families living in communities along the estuary, who grapple with poverty, illiteracy, lack of basic infrastructure, and child marriage, cutting down mangroves can provide a vital source of income in the face of economic insecurity. Without income stability and access to the financial services needed to invest in sustainable livelihoods, communities are pushed toward short-term survival strategies that undermine long-term ecosystem health. That’s why integrating financial inclusion into carbon projects is essential to making these initiatives sustainable.
In response, CGAP and blue carbon project developer West Africa Blue have partnered to protect and restore local mangrove ecosystems by leveraging financial inclusion to strengthen livelihoods and support a transition to more sustainable practices. The partnership is unique in that most nature-based carbon projects do not include financial services, making this collaboration one of the first of its kind. While the ultimate objective is to connect these communities with formal financial services, initial barriers such as geographic isolation and lack of financial literacy had to be addressed. Village Savings and Loan Associations (VSLAs) were identified as a first step to building financial capabilities at the local level, while also helping individuals invest in income-generating activities that reduce reliance on the harvesting of mangroves.
More than a Susu: the VSLA difference
The concept of group savings is not new to these communities. Like many rural communities in West Africa, susu groups, a type of rotating savings and credit association (ROSCA), are a strong tradition. These groups are built on trust and social cohesion, but often lack the formal structure, bookkeeping, and transparency needed for long-term sustainability and growth.
Our most recent visit to the region focused on bolstering this existing foundation by introducing 11 groups (with a total of 360 members) across three communities to the VSLA model, which operates more like an informal bank. Group deposits are lent to individual members and repaid with interest, thus supporting the accumulation of capital and enabling broader access to credit.
Trainings aimed to help susus restructure their operations, emphasizing key principles like transparent record-keeping, democratized governance, financial literacy, and more. We guided groups on electing a management committee and developing a constitution, ensuring that all members have a voice in the decision-making process. We also stressed the importance of regular savings contributions and charging interest to increase the capital available to lend.
Informal finance serves as a lifeline for vulnerable communities
Our approach was validated as we uncovered numerous stories of how savings groups were already economically empowering community members. For example, in Tengisan, being excluded from the power grid makes charging a mobile phone a logistical nightmare. Isata turned this daily struggle into a business opportunity. After saving with her husband to purchase a small, secondhand generator, she opened a phone charging business.
But growing a micro-enterprise requires capital, so Isata joined a savings group in early 2025 and secured a small loan of NLE 500 (about USD $20). It was this modest credit that allowed her to replace her worn-out chargers and invest in new sets. Today, Isata charges up to 20 phones a day at NLE 5 (about USD $0.25) each, providing a critical service and a steady income that bolsters her family’s resilience.
Still, Isata’s generator runs on expensive petrol and cannot meet the overwhelming demand for charging. Looking ahead, she wants to purchase a larger, more efficient generator or, ideally, a rooftop solar system.
Access to informal financial services directly supports conservation
In the nearby village of Bongay Lamina, we met John, who is using informal financial services to turn conservation into a profitable enterprise. About two years ago, John began to plant plum trees to serve as a natural windbreak to protect the island village from strong coastal winds. Additionally, the local plum tree, known for its durable wood, can be used for home construction and firewood, while the fruit can be sold and used to make juices.
To expand his project, John took a small loan of NLE 500 (about USD $20) through his susu group. He used this capital to buy seeds, fertilizers, and to hire labor. Today, his farm boasts over 300 plum trees, providing an alternative source of wood that reduces reliance on mangroves.
Connecting VSLAs with access to formal financial services will be critical to maximizing their potential
For both Isata and John, informal finance has been a game-changer. But the reality is that the limited capital mobilized by these groups can only go so far. As Isata looks forward to replacing her expensive, diesel-powered generator with a solar system and John seeks to expand his woodlot, they will eventually need access to formal financial services to grow their businesses.
This is why CGAP and West Africa Blue are exploring how to connect VSLAs that have benefited from our support with formal financial service providers such as credit unions and mobile money providers, and PAYGo solar companies. Once VSLAs have built capacity and demonstrated a strong track record, the next step will be to digitize transactions through the adoption of mobile money, which can help to build data on group finances and unlock access to formal lending.
Ultimately, we believe that financial inclusion is an essential prerequisite to the success of carbon projects like West Africa Blue. When communities have viable livelihood alternatives, they no longer need to resort to environmentally destructive practices. And as John and Isata’s stories demonstrate, even informal financial services like VSLAs can play a role in building a greener future for all.
