Saving for Change
Saving for Change is a methodology for self-managed saving and lending groups integrated with simple, relevant, high-impact training in health, business and money management. Saving for Change brings basic financial services to areas that are typically beyond the reach of microfinance institutions and, in doing so, creates sustainable, cohesive groups that tackle social issues facing their members and their communities. Saving for Change was jointly developed by Freedom from Hunger, Oxfam America and Strømme Foundation. Self-selecting groups of approximately 20 women come together and, over several weeks, make decisions about the management of their savings groups, with guidance from a trained field agent. The members elect a management committee and make decisions within a framework provided by the program, including their group name, social objective, savings amount, lending policies, cycle length, fines for infractions, etc. The field agent also trains the group on how to manage their meetings. Members save a set amount at every meeting, and periodically borrow from their pooled savings to meet their investment or consumption needs. Loans are repaid with interest, allowing the group fund to grow more quickly. Funds are only accessed during meetings in the presence of all members, and are kept in a locked cashbox between meetings. Savings meetings can last as little as 15 minutes, while saving and lending meetings can last up to an hour. Annually, members divide the group fund in proportion to their savings contribution, take stock of their achievements, and decide what changes to make as they begin a new cycle. In order for groups to manage meetings autonomously, without field agent oversight, the group record-keeping system for Saving for Change is adapted to the literacy and numeracy level of group members. In West Africa, an entirely memory-based system allows all members to validate transactions transparently. In Latin America, written records allow more flexible savings deposits and more complex lending policies. Group meetings also allow for discussion of group and community issues, and for education sessions. The field agent facilitates a 30-minute learning session during some group meetings, using the same skills necessary for establishing the members’ self-management of their group. For this reason, the preparation of the field agent to provide education only requires additional training on the content of the sessions. The content for these learning sessions is available from Freedom from Hunger, which eliminates the need for institutions to invest in costly development of their own materials. The same field agent who monitors the group’s activities can deliver learning sessions, keeping marginal costs low, or a dedicated staff may do so, allowing for greater specialization but increasing delivery costs.
Freedom from Hunger supports organizations worldwide in implementing Saving for Change by offering training workshops and support services in the following areas:
In many parts of the world, the very poor and particularly those living in isolated, rural areas have limited access to formal financial services. Rather than offer financial services, institutions that implement Saving for Change promote self-managed financial services. A wide range of nongovernmental organizations with experience in community development, health, literacy or agriculture can help the populations they serve access basic saving and lending services, without needing the systems and processes of financial service institutions. Furthermore, Saving for Change groups who meet regularly can become focal points for other development interventions, provided by the same or other institutions.
Livelihoods, Gender, Microfinance
- Burkina Faso
- El Salvador
- Economic Recovery and Development