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In Their Own Hands

How Savings Groups Are Revolutionizing Development

Berrett-Koehler Publishers, Inc.

Guiding Principles for Saving for Change

After years of promoting savings groups, I have identified nine principles that explain why the number of savings groups has grown so quickly, how they have replicated organically, and why these groups survive in the face of economic and political crises, armed insurgencies, drought, and hyperinflation. These same principles could be applied to any development initiative attempting to reach not just hundreds but thousands—even millions—of people at minimum cost in a way that is robust enough to continue long after outside staffing and funding has ended.

Start With a Vision of Scale, and Design for Viral Replication

Sir Fazle Hasan Abed, the founder of Bangladesh-based BRAC, the world's largest NGO, said, "Small is beautiful, but big is necessary." Every rural community is unique, but our task was to build a "good enough" intervention that could be duplicated widely. The sign of a well-implemented good idea is that others adopt it as their own. In Mali, well over half of the groups currently in place were trained by volunteers. Recall the conversation with Sali Coulibaly.

Less Is More, and the Simpler the Better

The key is to introduce a new idea and get out of the way as soon as those you are assisting can do it themselves. With too many visits and too much help, the groups remain dependent. My team developed a solution that met villagers' needs and was to be run by women in rural communities who had little or no formal schooling. For them, sticks, seeds, and pebbles were used to quickly tally outstanding loans, a system that proved to be far more accurate than written records. Simplicity translates into scale, low cost, and the spread of ideas by word of mouth.

Build on What Is Already in Place

Savings groups improve on traditional revolving savings groups—ROSCAs—which are already widely understood in the communities where we work. While savings groups and ROSCAs share the requirement that groups select their members, save regularly, and hold each other accountable, savings groups add variable savings, taking out loans when and in the amounts desired, improved record keeping, charging interest on small loans, and greater transparency. I knew we were on the right track when, after a few minutes of describing Saving for Change to a woman in Senegal, she responded, "I understand how this works. It's like a tontine, only better."

Be Sustainable

While many development programs have no lasting impact, approximately 95 percent of the Saving for Change groups in Mali, some of them trained almost ten years ago, are still saving and lending. Most are visited only every few months or not at all. While operating independently, these groups have survived a coup, an insurgency in the north, a major drought, skyrocketing food prices, influxes of displaced people, and faltering institutions, so there is little reason to believe they will weaken in the future.

Keep Costs Low

There are never enough resources. For an initiative to grow quickly and organically, costs must be low. For Saving for Change in Mali, support totaled $1,500 per village, which included training several groups and then progressively less frequent monitoring over three years. The documented impact justifies the modest cost—a decrease in chronic hunger, increased assets, more savings, reaching the poorest, and word-of-mouth replication within the village and neighboring villages as volunteers from established groups trained groups on their own account.

No Giveaways

Dependency kills innovation and restricts the viral spread of ideas. Alfred Hamadziripi, the Zimbabwean director of the CARE Village Savings and Loan Association (VSLA) program, told me of the disastrous first months of the program in his country. Each group received a matching grant equivalent to the amount they saved. The groups saved, received the match, and disbanded. Their motivation was to receive a handout, not the disciplined business of mobilizing and managing their own savings. CARE dropped the matching requirement in Zimbabwe, and the number of groups soared. In Saving for Change, the "no-giveaway" rule also means that groups pay for accounting forms and cashboxes. If there are no giveaways, those who choose to join groups fully recognize that the eventual success (or failure) of the venture is entirely in their own hands.

Insist on Local Control

Garnering local ownership can be a challenge, but it is a necessity. Local control allows the community to drive instead of only being along for the ride. The genius of savings group programs is that they can be carried out by local NGOs that devolve the responsibility for training more groups to volunteers. If groups depend on the presence of an outside staff person, they will disband when the outsider leaves.

Establish High Performance Standards and Insist on Meeting These Standards

Meeting high performance standards must matter in development work as much as it does in the business world. Know the targets that you want to reach and ensure that you get there. For example, each team of ten paid animators and a supervisor is tasked to introduce Saving for Change to three hundred villages with a combined population of three hundred thousand inhabitants. There were clear objectives for each team and each paid staff person. Each team was required to facilitate the training of eight hundred groups, of which two hundred were trained by the staff—one per village—and the remaining six hundred were trained by volunteer replicating agents who would train and support more groups after the staff was reassigned to another cluster of villages. Once objectives are clear, achieving them is much easier.

Embrace Learning and Innovation

Allowing for local control and respecting community input means constant improvement. Innovations from one village can spread only if the model is flexible and everyone involved is committed to learning. Using the principles of appreciative inquiry, NGO staff were periodically brought together and went through an exercise in which they were asked to define success in specific terms—a growing savings rate, excellent record keeping, and high attendance at meetings, among others. They were asked to rate how well the groups they were working with were meeting these objectives and then to come up with a plan for improving performance in any areas that lagged. Finally, to bridge the gap between planning and action, staff members were asked to commit to a specific action when they got on their motorcycles the next day to start to resolve this issue and to specify how success would be measured.

These principles are remarkably simple. In essence, each reflects the title of this book: In Their Own Hands: How Savings Groups Are Revolutionizing Development. If we truly believe that "they know how" and that our presence is to serve as a transitory catalyst of change, then the rest follows—scale, simplicity, building on what is there, sustainability, low cost, no giveaways, local control, setting standards, and embracing learning. I believe that this is the surest path to reaching the more than two billion people who could benefit and underpins my assertion that improving the lives of the poor need not be as complicated and costly as we once feared.

A Group Meeting

The following tale of a savings group meeting is a sketch drawn from many sources. The village Kouloukoura and its economy, environment, and social structures were crafted from a composite of villages in its region that have been closely studied by Oxfam America, Freedom from Hunger, Innovations for Poverty Action, and the University of Arizona's Bureau of Applied Research in Anthropology. The characters featured here are themselves composite sketches, drawn from case studies of and interviews with savings group members and data that indicates what a typical group in this area may look like, including its members' livelihoods, family structures, and finances.

Kouloukoura

Bintou was thinking about rain as she wiped sweat off her forehead and put down the short hoe she used for weeding. Hours before noon, the day was already hot. Bintou lives in Kouloukoura, Mali, a midsize village of a few thousand people located in Mali's expansive Koulikoro region. The region is tucked below the Sahara desert to the north, where agriculture gives way to cattle herding. Kouloukoura, like many of Mali's villages south of the desert, receives enough rainfall for villagers to cultivate many crops; the size of the harvest, though, is extremely vulnerable to the impacts of seasonal rains and drought.

Bintou was eager to cut short her time in the field to attend her Saving for Change meeting, even if it meant forgoing an hour or two of work she could do before the sun got unbearable. She hadn't seen some of the women in her group since the last meeting and was excited for the chance to catch up. She made one last sweeping glance over her fruiting tomato plants before bending down to hoist a wicker basket onto her head, overflowing with peanuts she'd brought out of storage earlier that morning. She walked briskly down a well-trampled path of off-white, hard sand, glancing across the small cornfields and tight stands of trees near her home.

As she walked, Bintou poked her head in the entryways of neighbors busy inside the low walls of their household yards. Each wall surrounded an open-air living space bordered by a few mud houses with thatched or tin roofs, round thatched granaries, and shoulder-high, open-roofed latrines and bathing rooms. Some of the yards had small gardens like Bintou's within their walls or just outside. Most were bustling with little kids and three generations of women cooking over pots perched on stones, over coals fueled by firewood the women had collected earlier. Other women pounded millet in big wooden mortars with heavy four-foot-long pestles. In one yard, two teenagers were throwing the pestles into the air and seeing how many times they could clap their hands before catching the mortar as it fell. The rhythmic knock of the mortar provided a steady beat under everyone else's movements.

At this time of morning, most men were out tending their corn and millet fields, while the women were up and about, finishing chores before heading out to the fields to join their husbands. Of course, they still had time to pause and ask after Bintou's health and that of her family as she went by.

A Savings Group Meeting

Bintou was one of the last to arrive at the mango tree where the meeting was held, so she quickly found her place in the circle of twenty-one women and sat down among the group, emptying the basket of peanuts in front of her. Some other women in the group were also shelling peanuts, while others held their young children. Everyone sat on pagnes, colorful, multifunctional cloth wraps that serve as skirts and wraparound baby carriers. Bintou leaned over to grasp hands and say hello to her friends and then pulled a handful of peanuts out of the pile and began to shell them, dropping the raw, hulled nuts back into her basket.

The group was sitting in the center of the village, the mango tree casting just enough shade to make the meeting pleasant as the hot morning sun climbed into the sky. With everyone settled, Aminata, the group's president, raised her voice to ask the first question. "Is everyone here?" she said in Bambara, the dominant language in the region, turning to the person on her right. Each woman made the same motion, confirming that the person who always sat next to her was indeed there. "What is our group called?" she sang out. The group replied, "Benkadi," meaning solidarity. Aminata continued through the group's opening process, a ritual that laid out the agreed-upon ground rules and expectations at every meeting. Restating the rules upfront tended to keep disagreements and confusion to a minimum, especially since the group had no written charter, which could alienate members who could not read.

"What is our goal?" President Aminata asked.

The members called back, "To divide what we have saved all year among ourselves."

"How much do we save each week? What is the fine for not saving? What is the fine for missing a meeting?" Aminata continued, pausing after each question for the group's reply. When the group had stated aloud the terms for loans they had agreed to and a reminder of the meeting time and place, the president called for the collection of savings.

Oral Accounting

Three women stood up. One held a key aloft as she stepped to the middle of the circle, while another bent down to pick up a metal box by her feet and brought it to the first. The president asked the group to announce the amount of money that should be in the box: 14,400 of the West African franc, abbreviated CFA (US$30). The two women unlocked the box and placed it down so that the third woman could count the money. There was respectful silence while she worked. She announced, "14,400 CFA." The first two women sat back in their places while the third, the cashier, remained with the box.

Next, the president asked to collect the fines owed from the last meeting for absences, tardiness, missing a savings deposit, and late loan payments. Failing to bring one's savings deposit meant having to pay a 50 CFA fine (10 cents) the next week in addition to bringing both weeks' savings. Being late cost another 25 CFA and an absence cost 50 CFA (5 and 10 cents, respectively) unless the member sent along her savings and a good excuse with another member.

A few women raised their hands and in turn called out the fine owed by the woman sitting to their immediate right. Group members always sat in the same order, so each person could act as a "helper" for the one next to her. When the president called the name of a woman who owed money, the woman stood, occasionally to the ribbing of her fellow group members if she was one of those who teased back. The group was serious about money but easy on each other. They repeated the amount of their fines and handed it to the cashier, who announced the payment to the group fund. Hearing each step made every member a participant in the accounting, ensuring that everyone could follow along and understand.

After the fines came the savings. While most women saved a single share of 100 CFA ($0.20) per week, many committed at the beginning of the yearlong savings cycle to bringing two, three, or up to five times that amount. When the fund was divided, those who saved more would receive two to five times the dividend of a woman who saved only one share. When it was her turn, Bintou stepped to the cashier and placed 200 CFA—two shares—in the palm of the cashier, who counted it and placed it in the box. She sat back down and grabbed another handful of peanuts.

Collecting savings and fees was the last part of the short weekly meetings, which usually dissolved into an impromptu party before everyone had to head back to work. Once a month the group held an extended meeting for paying old loans and taking out new ones and for hosting topical discussions and trainings. This was one of those longer meetings. Each member with an outstanding loan paid the interest on her loan, 100 CFA for every 1,000 CFA borrowed, or 10 percent per month. They decided to charge each other this high interest rate so that they could build the loan fund more quickly and receive a larger payout when the fund was divided. Once the interest was paid, those whose loans were due that meeting repaid them in full. Most of the loans were small, under twenty dollars; fifty dollars would be considered a large loan for the group. The majority of women repaid within one month, although some loans were for two or three months, and agricultural loans extended over as many as six months. After loan business concluded, the cashier counted and announced the amounts of savings, fines, and loans collected and the new total in the cashbox—26,000 CFA (about US$53). This was how much they could lend out this meeting.

Requesting Loans

The president then asked whether anyone would like to take a loan. Three women raised their hands, including Bintou. President Aminata called on her to speak first. Bintou pushed aside the pile of peanuts at her feet and stepped around her basket to stand in the center of the circle. She explained to the group that she needed a loan of 5,000 CFA to buy smoked fish and onions here in Kouloukoura to sell at the big weekly market in Soma. For the past year she'd sold these in Soma along with bags of roasted peanuts. With the loan, she could purchase more stock and expand the business. It had been a loan from her Saving for Change group that had allowed Bintou to begin selling in the Soma market last year.

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Excerpted from In Their Own Hands by Jeffrey Ashe, Kyla Jagger Neilan. Copyright © 2014 Jeffrey Ashe and Kyla Jagger Neilan. Excerpted by permission of Berrett-Koehler Publishers, Inc..
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