« Top Ten Savings Group stories of 2011 »

The year wouldn’t be complete without a Savings Revolution Top-10 list. Here’s my list of the top ten Savings Group stories of 2011, with thanks to those who made suggestions. As always, I’d love to hear the comments and ideas of our readers.

The list goes from the tenth most important all the way to number 1 – the most important savings group news of 2011. Read on.

10  The first year of Savings Revolution. This website was created to be an independent voice reflecting the enthusiasm and excitement of savings groups, embracing divergent points of view, and avoiding uncritical self-aggrandizement. We had our first blog post in January, and since then we’ve had over a hundred posts by twenty bloggers. Our readership keeps growing. As of today, we’ve had 9,394 unique visitors (all the visits that one person makes in a single day count as a unique visit). This figure have grown steadily from 169 visits in January, to 1,114 in November (our last complete month). Kim Wilson and I are moved by the enthusiastic participation of so many people – and I have to mention by name Eloisa Devietti, Suzanne Andrews, Greg Pirie, Jill Thompson, Ignacio Mas, all of whom made special contributions in one way or another – thanks so much! Special thanks also to SEEP for the chance to work together in getting information out about savings groups. 

9  Growth of banking linkages. I don’t know the full of extent of efforts to link banks to SGs, but I keep running into linkages in one form or another all over Africa and beyond. There has been and will continue to be a lot of discussion about whether, when and how to link, but what’s increasingly obvious to me is that linkages in one form or another are here to stay, and we should make the best of them.

8  Disenchantment with traditional microfinance. Our friend Beth Rhyne calls 2011 “the worst year for microfinance since forever,” and refers to the meltdown in Andra Pradesh and impact research challenging the long-standing claim that “microcredit alleviates poverty”. Traditional microfinance has indeed gotten a mess of bad publicity, so much so that I – a long-time skeptic – saw fit to defend its legacy in this blog post. As microcredit has lost its luster, to some extent, savings have picked up the slack, particularly in the popular press – see the next item…

7  Mainstreaming of interest in savings group. A few specialists have been talking about saving groups for a couple of decades, but the word seldom got very far beyond that. Things started to change in 2011. Two pieces of coverage stand out: First was this article in the New York Times by Nicholas Kristof, who later tweeted about the Savings Revolution website. And the year ended with this extraordinary article from the Economist magazine. The Economist and the New York Times – now that’s mainstream!

6  Continued growth of the Savings Group Information Exchange, or SAVIX. SAVIX became the standard reference source for self-reported facilitating agency statistics, and the number of agencies using it has grown steadily. In parallel, the VSL Associates website also grew, reflecting the steady increase in interest in the savings group approach. VSLA continued to be a remarkable free resource: Hugh Allen reports that there were 3,305 downloads of Savings Group tools from the website this year. Both of these are signs of the phenomenal interest in Savings Groups, and in the tools which Hugh graciously makes available to the world.

5  Winding down of the Gates funding. A big part of the recent growth of savings groups was funded by grants from the Gates Foundation to three facilitating agencies: CARE, CRS and Oxfam. That funding is coming to an end. There could be a silver lining to this cloud, as facilitating agencies work even harder to present the savings group concept to new funders, and as the push for efficiency means that more groups can be formed with less money than ever before. I suspect that this list next year will point to the growth of imbedded programs – that is, savings groups programs added into health, education, agricultural or other projects. Stay tuned.

4 AKF studies on linkages and platforms. Saving groups are often combined with other activities, and three years ago, the Aga Khan Foundation launched a learning initiative to discover what happened when savings groups were combined with other activities. The initiative supported a dozen field studies and desk reviews of projects around the world, and culminated in a synthesis report that I had the pleasure of co-authoring with Ben Fowler. It showed that … no, there is too much good information to sum up here. Download the report to find out more!

3 Rise of fee-for-service as the dominant service delivery model. For the moment, the approach in which trainers are trained by the facilitating agency and paid by the groups that they train and support is being practiced by an increasing number of projects. Guy Vanmeenen of CRS shares four reasons why he thinks fee for service is a good approach – (a) Efficiency and scale; (b) Quality of groups formed; (c) Long term support to groups; and (d) Livelihoods - the creation of employment for trainers. To these, I would add a fifth – the presence of the fee-for-service trainers provides a way to reach the groups with other products and services. We’ll be talking about the fee-for-service approach, and others, in Chapter 4 of the Frontier Book.

2  Credible quantitative research. The expansion of savings groups has been largely driven by anecdotes and enthusiasm. Now for the first time we are beginning to have some credible data about who the members are, what difference the groups make in their lives, and what the members do if the facilitating agency leaves. FSD Kenya has mined data from their FinAccess studies, and has put to rest the idea that the informal sector is only for people who can’t get into the formal sector for some reason; FSD found that people like multiple services, and informal groups have many advantages over banks, including the enforced savings discipline, and FSD has an ambitious research agenda for 2012 that will cast light on the extent of community driven group formation and the efficacy of different delivery channels. The first of the Gates-funded Randomized Control Group Tests, from Uganda, was previewed in October in Arusha, and shows that the impact of groups on the villages where they are located is quite limited, perhaps understandably so since the  research covered a very short period. I for one am waiting eagerly for the results of the broader, deeper and longer RCT in Mali. Finally, there is the great panel study being carried out by Hugh Allen and his associates, and reported on SAVIX - this jewel of a study is tracking 332 groups in six countries, but Hugh warns, “the acid test will be this March when we see how many groups made it past the (average) 18 months of independence mark”.

1 Arusha Summit and the Frontier Book. For those who were lucky enough to be there, the Arusha Savings Group Summit in October was a memorable event, and my choice for the Number One story of the year. One of the very best organized conferences I’ve ever participated it, it succeeded in producing a participatory environment in which experience and knowledge flowed easily in all directions. We all made new friends and professional contacts, and we all were delighted and inspired by the spirit of the conference and the quality and enthusiasm of the participants and the presentations. The follow up conference report, provisionally called “The Frontier Book”, is being written on-line on this site, an appropriately transparent and participatory way to document a phenomenon as transparent and participatory as Savings Groups.

That’s my list - If you agree or disagree, or have any other thoughts, I invite you to leave your comment below. 

Comments

[Hugh Allen]

I think that one the positive consequences of Gates funding winding down is that donors are likely to look more closely at the successful partners that have worked with Oxfam, CARE and CRS and start to fund them directly. Especially in the light of funding constraints and the need to drive costs down. I have recently completed an evaluation of Dutabarane's high quality VSL programme in Burundi, where costs are now down to less than $8 a head, using a fairly standard FO/VA approach. I think this is possible on a widespread scale if issues of accountability can be resolved. The facilitating agencies that implemented grants from the Gates Foundation have performed a hugely important service by incubating the best. Maybe it's time for the bigger agencies to move on. Or take a closer look at community-managed (not formal-sector linked) insurance and pioneer something equally revolutionary. Any takers?