We had a satisfying year in terms of readership. The number of readers rose almost every month, and went from under 2000 in January, to over 4000 in December. When we started four years ago, we were happy to have 20 or 30 visits a day; now we regularly get over a hundred, and often we have 200.
Some recent research (more on this in subsequent posts) showed that in a large sample of savings groups, about 5% of members said they had had their money “lost or stolen”. That’s one out of twenty members.
Now, quick, before you read further, please take a moment to answer this question to yourself: Do you think this is a good statistic, or a bad one? That is, do you think it shows that savings groups are a good place to save because only 5% of members lost money, or do you think that shows they are a bad place to save because so many people say they have lost money?
I think the way we answer that question will largely determine whether the Savings Group movement grows and makes a contribution in resilience, autonomy and empowerment to the lives of hundreds of millions of people, or whether the savings groups will fade away, becoming another interesting development fad, like Cooperatives or Integrated Rural Development. And your answer also indicates how committed you are to the possibility of Excellence in Savings Groups.
Jeffrey Ashe and Kyla Neilan have been writing In Their Own Hands: How Savings Groups Are Revolutionizing Development. We are very pleased to be able to help Jeff and Kyla get feedback on their work by posting drafts of the chapters as they become ready for comment, an exclusive for Savings Revolution readers.
Click on the menu bar above on the In Their Own Hands tab - or click here - for the first two chapters of the book. I’ve read them, and they are great. I particularly liked the Guiding Principles in Chapter 2: a very concise set of principles for doing savings groups right, I think.
Please do leave comments for Jeff and Kyla, even if all you say is, “Great book!”
Recently while visiting Naomi, a home brewer in Western Kenya, a customer came by to ask for Ksh 20 worth of liquor. He quickly gulped down his brew and took out a Ksh 1000 note from his pocket to pay. Naomi took the note and told him, “Go look for Ksh 20, then come back for this.” When he left, she explained that many customers come with large bills and she often doesn’t have change. They end up taking the liquor on credit and don’t pay their debts very quickly. She’s learned that it’s better to hold the bills than to accept a promise of future payment.
This got me thinking: In the world of low income Kenyans—a world in which
Just when we thought we had cycled through all possible catchphrases, 2013 ushered in some new ones.
A bit of ancient history
In the 90s, buzzwords moved like molasses. On the practice side, it took a decade and a half to transition from microenterprise development to microfinance. During that time, we made the big switch from “serving beneficiaries” to “attracting clients”. Presumably, it was better to profit from the poor than to benefit them.
At the end of the year, it is traditional to make Best and Worst lists. Here’s my take on the five worst ideas I’ve seen this year. Many of them are old ideas that just won’t die. Maybe this will help! They go from 5 to 1, saving the worst for last…
Being a relative newcomer to the field of microfinance, I have been a spectator to the microcredit boom and bust. I do wonder what made the notion of having poor people live in perpetual high-cost debt such an irresistible concept for so many people. How did it get so over-hyped? In a recent post in this blog, Paul Rippey feared this kind of triumphalist over-hyping taking over the sub-culture of savings groups, asking people to shut their marketing mouths, at least some of the time.
- Sustained demand for the savings model from rural women, with older groups showing strong sustainability
- Increasing commitment amongst savings groups to saving larger amounts over time
One of the weirder phenomena that I’ve experienced lately during visits to Savings Groups is IGA frenzy, or the idea that everyone should borrow for an Income Generating Activity, or IGA. Trainers assume that every member is raising chickens, weaving, planting cabbages, selling mangos, or doing some other activity that “needs a loan”, and that all they have to do is borrow from their group, invest in the activity, and then get rich. Sounds good, but it isn’t. Three reasons:
The Bogota Forum on Savings Groups, the first event of its kind in Latin America took place in Bogota, Colombia from December 4th to the 6th with the participation of over 200 practitioners eager to share and learn from experiences in Latin America and beyond. Participants brought great enthusiasm for a methodology that is starting to gain momentum in the region, especially thanks to the government of Colombia’s commitment (through the Banca de las Oportunidades) to expand Savings Groups as a means of reaching vulnerable populations. The 70,000 men and women reached by IED VITAL in Colombia, in partnership with the Banca de las Oportunidades, stand as an inspiration and a point of reference for smaller, yet growing programs in the region.
Local innovation is inspiring. Here is another resource - Afrigadget - as a follow up to Honey Bee, brought to my attention by one of our bloggers. I am posting on local innovation because I have seen how creative savings groups and their members can be. How can we encourage more?
Lack of traction with formal financial services is often attributed to an insufficiently granular understanding of client needs. I think the bigger failure is in not knowing how to distil the mass of research we continue to produce into compelling products.
Of course, there is always an element of conceit whenever one proposes any kind of new development intervention, even if it is something as mundane as a new financial service offering. And if the proposed service relates to microsavings, I can imagine how naive one must appear to so many doers and experts who for several decades now have focused on the credit side of things