A post on SR earlier this year highlights how savings groups in a set of communities rarely considered the timing of their share-outs.
Why is it that we organizers cling to the idea of a share-out at all? A stock refrain arrives: “the action audit”; “members join because of the share-out.” Let me challenge both of these rejoinders. First, using cash to clear the books is an antiquated way of keeping track of money. It is exactly the kind of primitive thinking keeps members from building their funds to a meaningful size to produce meaningful loans.
I had the pleasure of meeting these two ladies, Mary and Didaciene, a couple of years ago in a savings group in Rwanda. When the two women shared about why they were in their group, I wrote down their words (as
I came across this clever video on Duncan Green’s excellent Poverty to Power blog.
It goes well with the previous post, “Please shut your marketing mouth”.
Watch this video, and read the previous post. If they make you uncomfortable, then ask yourself if you are using your Savings Group program to raise funds by exploiting stereotypes. If you are doing that, please stop. It just hurts everyone.
This is a plea for us all to shut our marketing mouth for a while when we are talking about Savings Groups. You know the mouth I mean - the one that says how unqualifiedly wonderful SGs are, and talks about the amazing impact they are having on people’s lives. That marketing mouth. Thanks.
Look, I think Savings Groups are great - I love the excitement and feeling of empowerment, the convenience and the commitment savings, and the mutual support which helps members make it through difficult days. But - duh - Savings Groups are far from perfect. Visit ten SGs at random - truly at random - and you will find five with issues and possibly one or two with serious problems.
What would you say about a savings group where the members earn less than one percent interest on their savings, but pay 15% to borrow? What’s worse, they get none of their money back at share-out. Not one cent. Meanwhile, the group officers have passed secret rules that the members don’t understand that allow them to take money from the cashbox, and make themselves super rich.
Would you agree that was a pretty miserable Savings Group?
Alex Counts of the Grameen Foundation attended the Financial Inclusion 2020 Global Forum and blogged about it on the Center for Financial Inclusion website. I thought his remarks about how to do technology right were so pertinent that I copy them here. This is highly relevant to conversations that are going on today among savings group practitioners about the use of various technologies in helping SGs spread more reliably and faster. Recommended!
The Financial Inclusion 2020 Global Forum was a remarkable and historic
The book will show how development in the world’s
Readers who know me know that I love to travel but dread the loneliness of hotel living, especially where I know no one who might invite me to dinner or come to the hotel for a drink. So it is here where the very nice Mt. Meru hotel is my home for two+ weeks. This Saturday morning with no place I had to be, I slept late and had to rush in order to not to miss breakfast. Drinking coffee on the hotel terrace overlooking an expansive lawn, a group of women caught my eye.
They were running between two trees
Last Wednesday I got to lead a webinar for SMDP entitled “What’s Next for Savings Groups” for SMDP – the big question I was asking about was, Why haven’t savings groups spread faster by themselves? I proposed that there were three things that were keeping the Savings Group idea from spreading faster: First, the complexity of share-out, which many groups fail to learn to do, requiring external assistance seemingly forever; second, the cost of kits (boxes and passbooks and all that); and third, the trainer model, which is inherently top-down, and which makes growth dependent on the ability of INGOs to train and certify more trainers. I proposed some solutions, or at least partial solutions, to each of these constraints.