Savings Groups and Poverty

Why form Savings Groups?

For many donors and for their NGO partners, the objective in starting Savings Groups has become financial inclusion, the goal of bringing savings and credit and other financial services to as many people as possible. And Savings Groups are in fact an effective way of doing that.

For Savings Group members who go out to form groups on their own, their objective is to share a good thing, that hard-to-define mixture of financial and social support, networking and self-esteem, that members report they find in their groups.

For other development programs, Savings Groups are an effective platform for other initiatives, especially health but also education, literacy, and agriculture.

But increasingly, people are forming Savings Groups because they are an effective way of combating poverty. Remember that the UN defines poverty as the severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. Savings Groups can help reduce poverty in just that sense.

The Savings Group Action Team

A bit more than a year ago, in March 2016, at the 18th MicroCredit Summit in Abu Dhabi, Results invited some leaders in the development field to form action teams that would address and promote strategies where there was solid evidence that they could be effective in reducing poverty.  One of the teams to come out of the Summit was the Savings Group Action Team, which over the last year has added self-selected members and formed a diverse group to help use savings groups to eliminate poverty. The Action Team is made up of Rotarians, Savings Group experts, and other people with long experience in working with Results to build the political will and chart the course to ending poverty. The Action Team has met regularly to define its membership and mission, and we have written a mission statement [Link].

We know that Savings Groups reach poor people, effectively and efficiently, and that they do this by the millions. Some very credible documentation exists about this, that we want to bring together in one place.

““Everyone” may seem like an ambitious goal...”

But we want to go further, and investigate how programs can go deeper, reaching the the ultra poor. We are talking about those living on $1.25 per day or less. They are those who are beset by physical, human, and financial challenges, and usually do not have the family and social networks they need to meet those challenges. They are the people above all who are targeted by the Sustainable Development Goals, especially ending hunger, and ensuring a healthy life and well-being for all people of all ages. While Savings Groups reach the poor, they do not always reach the ultra poor. 

We know that some agencies, notably CRS, are systematically engaged in outreach to the ultra poor and in documenting successes and failures;  we want to learn what has been done, and what has worked so far.

We all know that Savings Groups by themselves will not eliminate poverty. The most promising avenues are likely to combine Savings Group creation with other approaches such as conditional cash transfers, mobile money, training, introduction of clean energy, and agriculture.

What’s next

The Action Team wants to start by launching action research in one or more countries, and simultaneously documenting what has been discovered about the best ways to end poverty. The research will include visiting existing programs as well as creating new Savings Groups among the ultra-poor to learn first-hand the hurdles that need to be overcome.

Based on that research, we will develop a plan laying out steps and the resources needed to bring Savings Groups to essentially everyone on Earth who would like to participate. “Everyone” may seem like an ambitious target, and it is! But the time is right: new approaches using media; involving the private sector, church networks and government agents; and facilitating peer-to-peer creation have shown that Savings Groups can spread much faster and farther than we had imagined.

Once we know how to reach everyone, we want to support all of the many partners who must be involved in doing their best work to bring about a noble goal, of making Savings Groups available to everyone. 

And of course, sometime soon we will need to move beyond our volunteer beginnings and find funding to carry out our program.

Over the coming months, you will hear more from the Action Team, and many of you will find ways that you can participate. Please write to us  if this work calls to you and you would like to participate with the Savings Group Action Team. There will be lots to do!

Who we are

The Savings Group action team is composed of Rotary Club members, Savings Group promoters and other development professionals.

The Rotary Club was at the table in 1945 when the United Nations charter was established, and is a huge and important network with 35,000 chapters around the world. Rotarians have been active with Results, and have taken a lead in efforts to eliminate polio; all that has given them great credibility and good will, which they can use now to help support the expansion of Savings Groups to the very poor. These include Steve, Gordon and  – Is that all the Rotarians? Can’t remember!

There is a nucleus of members with hands on experience in running innovative financial services programs to reach the very poor, including some of the world leaders in savings group promotion. These include Carmen, Jeff, Jong and Paul.

Lynn

Sherwood

Finally, the group is privileged to have two people with decades of experience in using  who have been leaders in using financial services to combat poverty. Bob Sample is XX. And finally John Hatch who is…

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