Dear Readers – A few days ago several savings group fans had a discussion on whether promoters of groups had a responsibility to layer on other activities that might ultimately benefit group members. Many promoters of groups believe that groups make an excellent platform for services in agriculture, health care, climate change, energy, etc. Others believe that savings group promotion should stay minimalist – that good savings groups will unlock the funds and empowerment needed for members to attract other valuable resources. We believe Hugh Allen did a terrific job defending a minimalist, standardized approach to savings group promotion. What do you think?

From Paul Rippey to Hugh Allen. (Savingsgroups.com and VSLA.net) I believe that if an institution - any institution - doesn’t include climate change in its strategic thinking, it isn’t thinking very well. It’s not just one issue out of many screaming for attention; it’s the cross-cutting issue of our times that will profoundly affect all of our lives, and increasingly so for subsequent generations.

Hugh’s Allen’s Response to Paul. As it happens Paul, I agree with you, entirely and without a hint of irony, about climate change (my office in Solingen hit 35 C this last summer).  But what if, as a programme promoter, I think other things are more important?  Should I be taught Right Thinking?   

At the back of what I’m saying is that poor people are really quite wise about what ails them and much more capable of dealing with the issues than we think they are.  This is what savings groups have taught me and would be a useful default concept to apply in determining where (and if) we should make the effort.  

To Which Kim Wilson Responded. If the poor are as wise as you say - or perhaps not very wise but at least as wise as the rich - then they will in fact be able to discern truth from rubbish. So will the field officers. We already have savings group field officers on a forced march, why not add a little sparkle that they and locals find useful? Savings group field officers might glad sell useful products or provide relevant messages in climate change, health or agriculture.  

Hugh Allen’s Response to Kim and Paul.  In development we always talk about sustainability and empowerment and then always find reasons why what we’ve done is not enough: why the gains may be insufficient and the participants still vulnerable. But what we rarely consider is that whatever extra we decide upon may not be essential and may undermine what we allege to prize so much about savings groups: their autonomy, self-confidence and the ability to manage their own development agenda.  After all, if we are still there, we prove that we think they remain in some way deficient and ‘in need’.

I know that proponents of making use of groups as a development platform will always talk about how they plan not to make such mistakes. But do they pass this on to an over-zealous FO with productivity targets to reach and an underlying disbelief in the rights and capabilities of the poor?  And, in all of my working life, I have never come across a programme that packs up its toolkit and moves on because it is convinced it’s done enough? Unless the money runs out. 

But let me tell you a tale which may explain why I think the way I do.

Between 2001 and 2004 I was the Country Director for ApproTEC in Tanzania.  We worked with the private sector to have commercial enterprises produce, distribute and sell high-quality treadle-pumps through a commercial chain comprised of a manufacturer, 3 wholesalers and 56 retailers.  We followed up 150 pump buyers and found that the average farmer who spent $120 on a pump and some pipes made an extra $777 per year over the next three years.  All we did was provide risk-management incentives to the supply chain and thereafter left them alone to get on with it.  

Enter the FAO, which enquired of us why we weren’t engaged in helping farmers who practiced irrigated horticulture to plan their production and planting cycles; nor helping them with marketing advice and the supply of other inputs.  We said that this wasn’t our business, so the FAO generously agreed to fund a study in which they asked us to track two cohorts for two years: 50 people who just bought pumps from a selection of retail stores and an additional 50 who also bought from the same stores and to whom we provided the services recommended by the FAO.  We had a pretty decent income measurement tool and did as they asked and after two years analyzed the results.  Both cohorts had increased production and income, but, on average, by almost exactly the same amount.  When we enquired more deeply we discovered that what the FAO recommended was being practiced by both cohorts.  Since we had unlocked the major constraint to production, both sets of farmers were equally motivated to study and solve the barriers to increased output.  It would seem that people who were left on their own were able to react in a more dynamic and positively self-interested fashion than the FAO had predicted. Once again, we had all assumed that poor people had needs that called for external solution (reflecting their presumed condition of helplessness) and under-estimated their capacities.   

As a result of this work, we stuck to promoting the sale of pumps and, after 3 years and 10,000 pump sales were able to infer from our research a  financial impact of $43.18 million.  We concluded that because all the other stuff would have cost about the same as setting up the marketing chain, we would have reduced the economic impact by about $20 million for no discernable economic benefit.  The point here is that what the FAO suggested we try sounded a logical thing to do, but it turned out to be much less necessary than everyone assumed.  Maybe we should ask ‘why?’ more often and be less inclined to ask ‘why not?’

If I carry this argument further in order to address the question as to why I’m uneasy about NGOs looking on groups as a way of getting a new product into the village (such as solar lamps) I would ask if there was work being done to develop a commercial distribution system, independent of groups, so that lamps were stocked in local retail stores, where shopkeepers could extol their benefits (if the margins are right), make money on the deal and continue to buy from a wholesaler.  Maybe there is, I don’t know, but I could guarantee to move many thousands of lamps in this way, through channels that are set up to do such work and which profit financially from the practice of their speciality. 

Finally, I know I may appear to hold rigid views on what constitutes a ‘proper’ SG, but I hope it’s not true (it might be).  Basically, I don’t think it matters whose methodology is used, so long as the basic principles are the same and the delivery system is professional.  But I do believe that once you’ve decided on a methodology (and have proven that it’s cost-effective and creates strong, profitable and stable groups), it’s necessary (if you want to go to scale) to standardize what you do so that everyone knows their job and enjoys doing it.  Allowing for evolution is essential if new insights, practice and technology are to be brought into play but it needs to be a managed learning process that leads to an improved way of doing things that is, to some degree, standardized. 

Note: This article was originally published in January 2011. We changed the date to move it up higher on our chronological feed. I think the participants in this discussion will still stand by their ideas.