Savings groups

One of the most common reasons for people to join a group is to undertake some form of saving activity. Saving is vital to enable people to manage shocks and emergencies, to smooth out peaks and troughs in income and expenditure, to make investments in homes, families and businesses and to provide for old age. There are many types of savings groups ranging from funeral funds to rotating funds to full blown savings and loan associations. Such groups are always user owned and provide a financial service to their members that may otherwise be unavailable to them. Participating in a savings group is one of the best ways to encourage social mobilisation among the poor and can lead on to other forms of livelihood development.

Library Resources

resource title type year resource
Understanding the Impact of Savings Groups Paper 2018

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Over the past decade, funders, practitioners, and researchers have made significant investments to understand the impact of Savings Groups (SGs). During this time, SG programming has evolved considerably. With an increasingly diverse body of programming, assessing the impact of SGs has become more complex. Savings Groups are no longer examined in isolation as they once were. Researchers are tasked with understanding the impact of SGs within integrated programs, with various combinations of components, within diverse settings. With the proliferation of new programming and research, what do we now know about the impact of SGs?

This systematic review of the evidence addresses this question by examining how participation in SGs – within standalone and integrated programs – contributes to specific types of impacts for members and their households. It updates findings from prior studies, and presents new lessons, particularly for health programming and for initiatives that target vulnerable populations. The paper catalogues 53 studies conducted between 2004 and 2017, each documenting primary research that includes measures of well-being. The paper describes and summarizes the evidence, identifies key gaps, and poses questions for future research. This learning brief constitutes a new stage in the ongoing conversation about SG impact.

Linking Informal Savings Groups to a Formal Financial Institution The Experience of Mwanga Community Bank in Tanzania Paper 2018

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Tanzania’s Mwanga Community Bank (MCB), a regional bank serving the Kilimanjaro region, received funding from UNCDF’s MicroLead programme to link informal savings groups (SGs) to the regional bank. Even though MicroLead funding and technical assistance ended in 2017, the bank continues to expand its work with informal groups.

This case study from UNCDF MicroLead describes MCB's group linkage process using agents and a mobile network.

Publisher UNCDF
Number of Pages 62 pp.
Primary Language English (en)
Region / Country Africa
Tanzania
Keywords Savings Groups
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Where Next After VSLA? Paper 2018

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This research paper offers a consensus understanding of the potential benefits, opportunities, challenges and best practices for extending the capabilities of informal savings groups. It focuses on linkage with formal financial services providers.

The paper explores the most common reasons for seeking linkage, and explores a number of alternative approaches. It discusses the available evidence on whether linkages work, the primary success factors, and common challenges and barriers to linkage. A section on technology explores the opportunities, and also the risks, in using technology as a part of linkage. It concludes with recommendations for non-governmental organizations currently facilitating informal savings groups.

Author Graham Seel
Publisher World Renew
Number of Pages 46 pp.
Primary Language English (en)
Region / Country Global
Keywords Village Savings And Loan Associations
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Protecting Savings Groups Reached Through High-Tech Channels: Guidance from the New Client Protection Principles for a Digital Savings Product Paper 2018

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Desipte what now appears to be ubiquitous acceptance and excitement that the world’s poor are or soon will be transacting financially through their mobile phones, digital finance, and in particular digital savings, is still relatively new. For countries like Burkina Faso, there is still significant ground to cover in digital financial services. Seventy-one percent of the population lives in rural areas. In 2014, it was estimated that there were approximately nine internet users per 100 people in Burkina Faso, but almost 80 percent of the population had a mobile phone connection (this references the number of unique mobile subscribers, which risks double counting since it is based on the number of SIM cards, and one individual could have multiple mobile connections). The promise of digital services is significant for the rural unbanked in Burkina Faso. However, there are very few clear-cut best prac ces for designing these services. There are even fewer best practi ces when designing for client protection. This case study, from the Freedom from Hunger’s Bridge to Financial Inclusion project based in Burkina Faso, highlights the experiences of integrating client protection principles – the minimum standards microfinance clients should expect – into the initial design and roll-out of a digital savings product designed for savings groups.

Author Brusky, B; Gray, B; Loupeda, C; de Briey, V.
Publisher United Nations Capital Development Fund (UNCDF)
Number of Pages 42 pp.
Primary Language English (en)
Region / Country Africa
Burkina Faso
Keywords digital financial services, Savings Groups
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Group Savings From Theory to Practice: UGAFODE’S GROUPSAVE: Considerations for financial service providers Paper 2018

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This case study explores the challenges and opportunities of linking savings groups to formal financial services for rural, low-income women and men in Uganda.

UGAFODE completed a six-month pilot of GroupSave, with only 148 GroupSave accounts opened out of the 448 targeted. Facing lackluster results, the Business Growth department and MEDA embarked on a new journey to understand why customer adoption by savings groups was lower than expected and why many of the newly opened accounts became dormant.

As detailed in this case, the answer lies in several different places. The journey of transforming from a credit-led MFI to a savings and lending institution is not straightforward. Nor is the process of mobilizing savings group clients and rolling out a new alternative delivery channel connected to mobile money. While client surveys and other stakeholder interviews still indicated that there was a clear market need for this product, the UGAFODE and MEDA team hypothesized that continuous customer engagement could be the missing ingredient.

Author Justina Li and Jennifer Ferreri
Publisher UNCDF
Number of Pages 40 pp.
Primary Language English (en)
Region / Country Africa
Uganda
Keywords Savings Groups
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The Franchisee Model for Savings Groups Case Study 2017

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CARE International’s MicroLead-funded programme in Tanzania was designed to empower women economically through informal savings groups, using CARE’s Village Savings and Loan Association Group (VSLA) methodology and linking these groups to formal financial service providers. The franchisee model - a model which through CARE Kenya’s programming has been found to substantially reduce the cost of VSLA formation and lead to sustainable group replication – was selected as the delivery method for this programme. This represented a new approach for CARE Tanzania.

CARE Tanzania learned throughout implementation that this cost-effective model presents challenges, but that it has advantages as well, successfully growing household and community savings and allowing savings group members to save at and borrow from formal financial institutions.

Author Michael Pierson, Joanna Howarth. et al.,
Publisher UN Capital Development Fund
Number of Pages 26 pp.
Primary Language English (en)
Region / Country Eastern and Central Africa
Tanzania, Kenya
Keywords Savings Groups, Franchisee Model
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Program Quality Guidelines for Savings Groups Guideline 2015

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The growing popularity of SGs has brought with it much excitement, but has also highlighted some inherent challenges. As the benefits of SGs become increasingly apparent, new and diverse organizations are entering the field and adopting the methodology with a variety of goals and varying degrees of rigor. At the same time, organizations that have traditionally facilitated SGs are innovating with new approaches and technologies; while most of these innovations are assumed to bring efficiency, sustainability, and greater choice to SG members, their long-term impacts are still unknown.

To ensure that SG members are not harmed by this unprecedented growth and innovation, SEEP’s Savings-Led Working Group (SLWG) brought together SG practitioners to define minimum standards for quality programming.  Quality programs are understood as those programs that prioritize members’ welfare and that provide members with lasting and measurable benefits while minimizing risks and promoting group sustainability.  Additionally, practitioners stress the importance of programs serving a large numbers of disadvantaged people in diverse contexts. 

The Program Quality Guidelines (PQGs) begin with the conviction that facilitating agencies have a responsibility to implement quality SGs that safeguard the wellbeing of members and the security of their assets.  They represent a sector-wide effort to build quality from the onset as a guarantee for consumer protection, rather than waiting for problems to emerge before taking steps to address them.

Connecting the World’s Poorest People to the Global Economy: New models for linking informal savings groups to formal financial services Report 2013 English (en)

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The report examines the potential of innovative models to link informal savings groups to formal financial services in Africa. The report looks at lessons from eight different projects conducted over twelve months in Rwanda, Kenya, Tanzania, Uganda and Malawi. They highlight the potential that savings groups have to act as a first rung on the financial ladder for those who are otherwise excluded. The projects aimed to address the limitations of village savings and loan associations by offering complementary products and services that the group itself could not provide.

Connecting the World’s Poorest People to the Global Economy: New models for linking informal savings groups to formal financial services  -  English (en)

The Evidence-Based Story of Savings Groups: A Synthesis of Seven Randomized Control Trials Paper 2013 English (en)

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This paper surveys the results from seven recent, prominent RCT evaluations of SGs in seven countries. It consolidates the findings in a single document that reflects upon the commonalities and differences across the results and places them within the broader body of evidence about the role of SGs in the lives of their members. The paper presents ways in which the SG community is using the body of evaluation research to inform and improve its programs. Information about the implementation and results of the RCTs has been collected through publicly available results, results not yet publicly available, and a series of interviews with researchers and programming specialists in the field. The goal of this synthesis paper is to consolidate knowledge about general outcomes of SG participation.

The Evidence-Based Story of Savings Groups: A Synthesis of Seven Randomized Control Trials  -  English (en)

Village Savings and Loan Associations Document 2006

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The Village Savings and Loan (VS&L) model is a savings-based approach that has proven on a significant scale that it can substantially fill the gap between the needs of the poor for financial services and the ability of banks and MFIs to provide these services. It provides sustainable and profitable savings, insurance and credit services to people who live in places where banks and MFIs do not have a presence such as rural areas and urban slums.

The model was originally developed by CARE in Maradi, Niger, in 1991 and has spread to 17 countries in Africa, 2 in Latin America and 2 in Asia, with over 1.25 million participants. A VS&LA is a self-selected group of people, (usually unregistered) who pool their money into a fund from which members can borrow. The money is paid back with interest, causing the fund to grow. The regular savings contributions to the group are deposited with an end date in mind for distribution of all or part of the total funds (including interest earnings) to the individual members, usually on the basis of a formula that links payout to the amount saved. This lump sum distribution provides a large amount of money that each member can then apply to his/her own needs.

This training guide describes the VS&L methodology and then provides detailed instructions on how to initiate and provide the training that groups will need. It covers group leadership, elections, developing policies and a constitution, record-keeping and procedures for managing meetings. The manual includes examples of stories and games that can be used in the training process and examples of all the forms that are required. A management information system for field officers involved in promoting the groups is provided in an accompanying spreadsheet.

This is a highly practical and useful guide which promotes a methodology that deserves the widest application and use in rural areas of Africa and elsewhere. The guide and the spreadsheet are downloadable from the RFLC and can also be downloaded from the VSLA website. You should regularly check the VSLA site for updates and new releases.

Author Allen, H.; Staehle, M.
Publisher VSL Associates
Number of Pages 140 pp.
Primary Language English (en)
Region / Country Global
Keywords Savings And Credit Association, Self Help Group, Village Bank
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Promoting Quality Bookkeeping in Self-Help Groups: The Mahakalasm Management Information System Paper 2006

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This document which is one of the Learning Products generated under the "Improving Efficiency - Maximizing Human and Physical Resources" Practitioner Learning Program, introduces the book-keeping system that the Covenant Centre for Development (CCD), based in Madurai, India, devised for the self-help groups they have promoted in Tamil Nadu. The paper first introduces the concept of self-help groups (SHGs) in India and gives some background to the work of CCD.

The authors then go on to explain the details of the books of accounts which the SHGs have to keep and how they made the system as simple as possible so that the group members could learn to manage it themselves. They give an interesting account of the challenges they faced and where they see opportunities for improvement. They conclude that accurate book-keeping is essential for the strength and long-term stability of SHGs and suggest that their paper-based MIS helps groups to maintain records in a compact, efficient and systematic manner. An appendix at the back provides an example of the system and some of the layouts used.

Author Parikh, T.; Sasikumar, K.; Olaganathan, S.
Publisher SEEP Network
Number of Pages 30 pp.
Primary Language English (en)
Region / Country Global
Keywords Bookkeeping, Self Help Group, Management Information Systems (Mis)
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The group savings resource book Book 2002 English (en) Spanish (es) French (fr)

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This book is the fourth in a series of FAO manuals on small farmer group development. It aims to encourage development agents to help the poor strengthen their capacities to accumulate productive capital through savings groups. The book is divided into two parts:

  1. A section discussing the advantages and disadvantages of saving in a group, the constraining and enabling factors to consider when starting a group saving activity and some commonly used group saving methods.
  2. A section that describes various tools that can be used to collect information when starting a saving activity, improve personal financial management skills, plan for investment and growth and monitor and evaluate the saving activity.

The group saving methods described include:

  • Rotating savings and credit associations
  • Accumulative savings and credit associations
  • Credit unions
Book  -  English (en)

Documento  -  Spanish (es)

Document  -  French (fr)

Author Rim, Ji-Yeune; Rouse, J.
Publisher Food and Agriculture Organization of the United Nations (FAO)
Number of Pages 88 pp.
Primary Language English (en)
Region / Country Global
Keywords Savings, Savings And Credit Association, Savings Groups, Credit Union
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Savings Group: Save a Little, Save a Lot Study Guide 2002

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This useful twelve page booklet is written with simple text and many illustrations. It is designed for use by women who have attained a degree of literacy and want to continue their self-learning. The booklet is published as a prototype which facilitators can adapt and translate as needed to fit their own local circumstances.

The booklet starts with a story illustrating the benefit of having some savings and goes on to cover the following topics:

  • What is a savings group?
  • How can the savings group benefit me?
  • How can I save money at home?
  • How can we form a savings group?
  • Choosing a leader and a record-keeper
  • Setting rules
  • Procedure at the bank

It is a good example of designing simple material to promote the concept of self-help and the potential benefit of establishing a small savings group to solve money problems.

Author Asia/Pacific Joint Production Programme for Neo-Literates in Rural Areas
Publisher Asia/Pacific Cultural Centre for UNESCO
Number of Pages 12 pp.
Primary Language English (en)
Region / Country Global
Keywords Informal Group, Money Management, Savings Group
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Internal Savings and Lending - the Simba Project Document 2002

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This self-contained manual is a step-by-step guide for trainers who wish to set-up and run workshops aimed at enabling communities to successfully understand the purpose of, and ultimately deploy, Savings Clubs. The guide endorses a Participatory Reflection and Action / Participatory Rural Appraisal, which believes that learning should be a two-way process. As such, the workshop is based around interactive training sessions that consist of a series of tasks and activities, rather than lectures.

The manual is divided into 3 main sections:

  1. An introduction that gives details about the programme and the methodology;
  2. Instructions for running 10 sessions of the Internal Savings and Lending Programme. Each session is set to last about 2 to 3 hours, but can be adjusted depending on interest and activities covered;
  3. Pictures, charts and handouts to be used in the workshop

Sessions 1 and 2 are community mobilisation sessions. They aim firstly, to involve the stakeholders/community leaders and get their support for the project, and secondly, to inform people in the community who might want to join the savings club. These sessions are also designed to give the trainers an idea of the community’s needs and goals and indeed assess their initial reaction to the idea of savings clubs. These sessions are:

  • Session 1: Stakeholders Meeting
  • Session 2: Community Meeting

Sessions 3-9 are the main training modules. These sessions are broken down as follows:

  • Session 3: Group Selection and Group Awareness, Part 1
  • Session 4: Committee Selection
  • Session 5: Fund Development and Savings
  • Session 6: Internal/External Lending and Interest
  • Session 7: Loan Applications and Appraisal
  • Session 8: Creating a Constitution and Group Awareness, part 2
  • Session 9: Record-Keeping and Financial Evaluation

Finally, Session 10 wraps the programme up with an evaluation of the course and an assessment of what participants have gained from it. This session even provides lyrics to a Savings Club Song!

  • Session 10: Unpacking and Evaluation
Author Knight, V.
Publisher CARE International in Zimbabwe
Number of Pages 136 pp.
Primary Language English (en)
Region / Country Global, Africa, Eastern and Central Africa, Northern Africa, Southern Africa, Western Africa
Zimbabwe
Keywords Savings, Lending, Savings Groups
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Forming Women’s Savings and Credit Groups Guideline 2000

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This is a manual with a difference. It has been created by MAFEC, Mutuelle des Associations Feminines D’Epargne et de Credit (Women’s Savings and Credit Association Mutual) in Mauritania. The contents originated from members’ daily observations. It consists of a series of observations, each of which is accompanied by an illustration and a series of key points relating to the observation.

For example, one observation is "A REGULAR CONTRIBUTION IS NECESSARY" and this is accompanied by the advice:

  • Set realistic sums that have been adapted to the women’s ability to contribute on a regular basis
  • To assure timeliness, fix the frequency (daily, weekly, monthly, etc…) of mandatory contributions
  • Incorporate financial discipline and expect members to follow the rules

There are 27 observations in all and the material might easily be adapted to other locations and their national and cultural realities. Alternatively it may inspire others to follow this example and encourage people they are working with to develop a guide on the basis of their own thoughts and observations. The manual contains both the original French and an English translation.

Learning Game Document 1999

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The Learning Game has been developed by Freedom from Hunger to teach new coordinators, field agents and other staff how the "credit with education" model works and how to interact with credit association members. It is also intended to introduce potential clients to the ideas.

The Game involves a four hour simulation of key events in the promotion, organisation, training and start-up of a credit association - the core feature of the credit with education approach. It includes example role plays, stories and other tools, which can be adapted to specific local situations. The Game was first used in Ghana in 1990 but has since been used successfully in Honduras, Bolivia, Mali, Burkina Faso, Uganda, the Philippines and Thailand.

Author Vor der Bruegge, E.; Stack, K.E.; Dunford, C.
Publisher Freedom from Hunger
Number of Pages 64 pp.
Primary Language English (en)
Region / Country Global
Keywords Agricultural Credit, Adult Education
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Credit Association Training Manual Document 1999

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This practical guide walks the field agent through a series of training meetings that help a group form a Credit Association and become ready to receive its first loan. The meetings help the group organize their ideas and come to consensus on Credit Association management, introduce concepts and rules of group-based lending and the importance of savings, and discuss the education component of Credit with Education. The training meetings are an excellent opportunity for the field agent to establish his or her role as facilitator and to begin the empowerment process.

Author Vor der Bruegge, E.; Stack, K. E.
Publisher Freedom from Hunger
Number of Pages 97 pp.
Primary Language English (en)
Region / Country Global
Keywords Group Formation, Credit Association, Group Lending, Savings, Empowerment
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