Microcredit Summit Campaign director, Larry Reed, addressed the Savings Group Conference on “Expanding Financial Inclusion and Development,” which was held March 4 – 5 in Arlington, VA. The conference convened a broad community of stakeholders to discuss experiences, results, and impacts from Savings Groups programs. The conference culminated in participants collaboratively defining the vision of Savings Groups going forward. The following are Larry’s closing remarks.
It has been my great pleasure and honor to have spent these last two days with you learning about all that is being accomplished through Savings Groups. In the previous session we heard about the goal to reach 50 million savings group members by 2020 and were asked to write down what our part might be to help make that happen.
I can answer for the Microcredit Summit Campaign.
I want to be a megaphone for you, a place where your message of providing financial services through self-managed groups can be spread to all those who work on financial inclusion.
Now, at the end of this conference, I would like to give you some words of commendation and caution from one movement to another. The Microcredit Summit Campaign began with a large international Summit that brought together more than 2900 people in 1997, including more than 20 heads of state and government and 1,500 organizations from 137 countries. At that first meeting, we set the goal to reach 100 million of the world’s poorest with microcredit and other financial services. When we started counting the number of microcredit clients in 1998, we found that we were starting with a base of 16 million clients.
Over the past 16 years we have learned a lot about building and sustaining a global movement. We’ve done some things well and we’ve done other things that we would definitely do differently, knowing what we know today.
I want to pass on my advice to you in four phrases.
1. I’m Part of Something Bigger
I commend you for the ambitious target that you set today for having 50 million people in Savings Groups by 2020. Starting at 7 million today, that puts you on a path with a similar steep slope to the one that you have been on.
Setting ambitious targets is important for a global movement. It helps everyone who participates see how their work fits into a much bigger whole. While each individual person or institution may only be able to contribute a small portion of the whole, the sum of all these activities depicts an international force that makes it possible for us to believe that we will see the end of severe poverty in our lifetimes.
As a movement, you will need to keep all of us informed on how we are progressing against this audacious goal and what we can be doing to help bring it about.
2. Count What Matters
While it is important to lead with a large goal, it is also imperative to measure whether or not you are achieving the results you are aiming for. Your end goal is not just to include a large number of people in Savings Groups, but to see those people benefit in some way from their participation.
We have learned this lesson the hard way in the microfinance community and the Microcredit Summit Campaign, specifically. When we started, we counted only the number of clients reached, assuming that all clients would experience positive benefits. We saw it as our job to promote the sector, and we tended to tell only the stories of the best candidates in public.
Then came the academic studies. What they showed us was that the benefits for many microfinance clients were much less than what we had communicated.
This was closely followed by one crisis after another of over lending fueled by commercialization, demonstrating that some microfinance organizations cared more about their own bottom line than their clients’ welfare. We have been rushing to retrofit our systems ever since, developing initiatives like the Smart Campaign and the Pro-Poor Seal of Excellence to insure that clients are protected from harm and that we can show that we are accomplishing the results that we set out to achieve.
I encourage the Savings Group movement to set quality indicators from the start. In the next year or two, develop indicators not only of the number of clients you are reaching, but also whether those clients are experiencing real benefits as a result of being part of a Savings Group. I know at this early stage it is hard to imagine that anyone could use these groups for personal profit and in the process do harm to the group members, but that’s what we once thought about microcredit.
I also encourage you to be as open about your challenges and failures as you are about your successes. I know that this is hard when you’re trying to promote a movement, but you will gain much more credibility if outsiders can see you taking on your challenges in the light of day.
When the day comes that someone wants to publish a study or a story that shows a negative side of Savings Groups, you will be able to show that not only are you already aware of it, but you are working to fix it.
Coming tomorrow [update: read here]
The conclusion of Larry’s closing remarks to the Savings Group Revolution:
It’s Not About the Money (Money, Money)
I want to encourage you to continue to experiment with ways that will allow Savings Groups to start and spread without external subsidy. If you can, the growth of your movement will not be dependent on donors but will instead depend on your ability to communicate your message and get others to spread it for you…
No One Owns a Fire
There is a saying in Zimbabwe that “No one owns a fire.” People built their cooking fires by borrowing hot coals from someone else’s fire. In this way, every fire had its origins in the fires of others throughout the community. The work of Savings Groups has grown into a global movement because this is the attitude you have taken to what you learn and experience…
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