Innovations and Inspirations. Pathways out of poverty for the poorest.
Category Archives: Savings groups
Savings groups (aka village savings and loans associations)
Savings Groups are composed of 15 to 25 self-selected individuals who meet regularly and frequently to save; amounts are based on each member’s ability. They provide members a secure place to save, the opportunity to borrow in small amounts and on flexible terms, and affordable basic insurance services.
Savings Groups contribute to end extreme poverty for, among other reasons, they reach people that traditional microfinance cannot reach and have a real social impact by strengthening communities and increase solidarity among villagers.
Join the Mifos Initiative and DreamStart Labs in a new, bold, and momentous initiative. They are collaborating on a joint Campaign Commitment that embodies the spirit of the 100 Million Project with its measurable approach and global outreach for the financial inclusion of the world’s extreme poor.
These two Commitment Makers will begin by providing a sample of savings groups from various countries with software to manage their financial records. Working in the lean startup method of “build-measure-learn,” they will adjust and fine-tune their software to meet the needs of the extreme poor. Not only will the software empower families and communities to become part of the formal financial services system, but more importantly, it will provide crucial data that will improve product design and the lives of the families who receive them.
BECOME PART OF THIS INITIATIVE. Mifos and DreamStart are looking for a partner to roll out this platform. The ideal partner for this project will be a highly motivated, committed organization with a global network of saving groups. The Mifos Initiative and DreamStart Labs hope to welcome this partner by the end of the month and announce this exciting new Commitment at the 18th Microcredit Summit in Abu Dhabi this March 14-17.
In his presentation today at the Inclusive Finance India Summit New Delhi, Larry Reed featured Mapping Pathways out of Poverty: The State of the Microcredit Summit Campaign Report, 2015. The report is now available online. We will also publish the full report in French, Spanish, and Arabic in early 2016. You can also read previous reports online, just select the year of interest from the drop-down menu “Previous Reports.”
At our 2013 Microcredit Summit in the Philippines, we focused on the partnerships required to deliver financial services to those living in poverty. At our 2014 Summit in Mexico, we focused on innovations in microfinance with a demonstrated capacity to reach those in extreme poverty. This year, we use the report to explore, in more detail, our six financial “pathways.” Each pathways has a chapter, and each chapter does the following:
>>Authored by Alex Dalitso Kaomba, development consultant and freelance writer
At 39 years of age, Sarah Chikuse’s health is visibly better than the other women in her village. A single mother of two, she lives in Kang’oma village on the outskirts of Lilongwe’s Area 23 in Malawi. Her day starts at 4:00 AM when she usually wakes up to the din of her neighbors’ jerry cans and water tins at the only borehole in the village.
Sarah starts by lighting up her charcoal burner so that it gathers heat while she fetches water at the borehole. Next on the routine (if it’s during school term) is preparing her daughters for school. Once she bids her daughters goodbye, she tends to her newly acquired livestock.
Acquiring a pig is one highlight on her growing list of achievements. Sarah counts herself a success in being able to afford three meals a day for her family and providing her children with a basic education. She has paid their school fees and provides their books, uniforms, and lighting for evening homework.
Landlocked Burkina Faso is one of the poorest countries in the world with 44.6 percent of its population living on $1.25 or less per day. A recent CGAP publication draws on “resilience diaries” of 46 women in rural households in the northeastern zones of the country to determine how different financial services contribute to and affect household resilience.
Twenty-five women are members of village banks with the Reseau des Caisses Populaires du Burkina Faso (RCPB) while 21 are members of savings groups with the Office de Développement des Eglises Evangéliques (ODE). The seven-month project was conducted by Freedom from Hunger.
The diaries were used to understand the following:
The strategies poor households employ to manage economic, environmental and health shocks that disrupt their financial lives.
The roles formal, non formal and informal financial products play in improving household resiliency and building assets.
>>Authored by Kristin Smith, Program Intern for the 100 Million Project
Just a few weeks before joining the Microcredit Summit Campaign team, I traveled with Global Brigades to teach financial literacy workshops and provide microenterprise consulting to small business owners in an indigenous community in Panama.
The program, founded in 2003, sends university students from the United States and select European countries on a series of brigades to Panama, Honduras, Nicaragua, and Ghana to “strengthen the health and economic development of communities” by meeting a certain aspect of their “holistic model.” Learn more.
Their holistic model attempts to assess and address the most dire needs of developing communities in an intentionally sequenced process to help them achieve a state of sustainable self-sufficiency.
>> Authored by Shameran Abed, Director, BRAC Microfinance Programme
Shameran Abed, BRAC’s Director of Microfinance, joined the Microfinance CEO Working Group in January. He and BRAC are welcome to additions to this collaboration. He joins the Working Group’s efforts to support the positive development of the microfinance industry and brings tremendous insigShameran Abedht into the discussion around pathways out of poverty.
This month, the results from six randomised controlled trials (RCTs), published in Science magazine highlighted a model of development that is an adaptable and exportable solution able to raise households from the worst forms of destitution and put them on to a pathway of self-reliance. The graduation approach — financial services integrated within a broader set of wrap-around services — is gaining steady recognition for its astonishing ability to transform the lives of the poorest.
>> Authored by Jeffrey Ashe, Fellow, Carsey school of Public Policy, University of New Hampshire; Research Fellow: Global Development and the Environment, Tufts University
I read the recent World Bank News Flash entitled “International Funding for Financial Inclusion” . In 2013 a total of $31 billion was invested in financial institution building, but what if just the grant proportion if this amount, $2.9 billion, was invested in training savings groups?
After the success of Generation Next: Innovation in Microfinance, our 17th Microcredit Summit (Mexico in 2014), the Microcredit Summit Campaign conducted a Listening Tour to identify how this next generation could contribute to ending extreme poverty (those living on less than $1.25 a day) by 2030. The theme that emerges from this consultation will be reflected across the Campaign: in the 2015 State of the Campaign Report, the 18th Microcredit Summit, and Campaign Commitments.
With the post-2015 development agenda under negotiation, the financial inclusion and microfinance sectors have an opportunity to assess our role in shaping the international development framework and reflect on the impact we can have on the lives of millions of the world´s extreme poor. Our Listening Tour was the first step in surveying our coalition of partners to see what our role in this endeavor should be.
The Listening Tour was our time to listen — and your time to speak — on the issues that the microfinance and financial inclusion sector face and served two purposes. First, it was our hope to find out how our audience (you) felt about the World Bank’s goal of eradicating poverty by 2030, and equally important, we wished to consult you in identifying the topics that were most pressing and urgent. Español | Français | Continue reading →
As part of their 2014 Campaign Commitment, Carsey School of Public Policy co-hosted a learning event on Thursday, December 11th with us to share the value of starting and scaling up savings groups. William Maddocks (Carsey School of Public Policy) facilitated an engaging discussion, featuring Jong-Hyon Shin (Fundación Capital in the Dominican Republic), and Jeffrey Ashe (The Carsey School of Public Policy).
Summary of the E-Workshop
The E-workshop focused on two main issues:
A 2-hour training method to create new savings groups
The link between savings groups and conditional cash transfers.
Jong-Hyon presented her own experience in the Dominican Republic, and Jeff talked about the takeaways from his research in West Africa.
“Poverty is a complex matter. We need multiple solutions, synergy, leverageability, scalability; we all need to work together and do much more.” —Roshaneh Zafar, Kashf Foundation Español FrançaisContinue reading →