This week’s guest writer is Allison Enns, Food Security and Livelihood Coordinator for MCC Canada. She visited Kenya, Ethiopia and Cambodia in fall 2016 as part of a Canadian Foodgrains Bank tour to learn about savings groups.
Makueni County, Kenya – One by one, women come to the front of the circle and call out the amount of money they will be saving. In unison the group calls back the amount— “500 shillings!” —as bills and coins are dropped into a communal pot. Each woman does the same until all members of the group have announced how much they are saving this week. The total is counted and stored in a cooking pot, while amounts are meticulously recorded by the secretary.
This is a typical scene for over 12 million members of savings groups around the world. Savings groups are community groups that meet together regularly to save money, provide small loans to one another, and support each other financially when an unexpected cost such as illness occurs. Members create the rules and regulations for how the group functions, and manage the accounting entirely on their own.
One of the most profound impacts of savings groups is that they provide an ability to save and obtain loans for communities who lack access to banking services. Membership is targeted to those who are the most vulnerable and marginalised—those who aren’t eligible for loans from Micro Finance Institutes and those to whom local moneylenders are reluctant to loan money. Instead of relying on these outside resources that charge high interest rates and cause deep debt, savings group members are able to use their own resources to save and access loans that can help them start small businesses, buy livestock or seeds, support their families with food during hungry seasons, and send their children to school.
Savings groups not only provide financial support; they can also contribute to changes in attitude and perspective. Group members are most often women, and many express how when they first joined the groups they did not think it was possible to earn their own money, and had no say within their homes regarding household spending and other important decisions. In fact, most of their husbands were not supportive of them joining the groups.
One woman in Ethiopia tells her experience of joining a savings group and explains how, when she first joined, her husband teased her and thought nothing could come of such a group. Despite this, she persisted and continued to save, eventually being able to take out a significant loan to buy livestock and earn an income. When there was a particularly difficult time of year, she took out a loan to buy food for her family. Her husband was shocked at the strength of his wife during such a difficult time, and speaks emotionally about how, as a result of his wife’s involvement in the group, he didn’t need to ask for a loan from a moneylender. “Going to a moneylender is like telling them your secrets,” he shares, “my wife saved me from this shame.” He is now supportive of his wife’s involvement in the savings group and has even joined one himself. Unlike before, they now make important household decisions about spending together.
Last week was International Development Week, a time when there is a spotlight on the challenges and opportunities of working to support development in Canada and abroad. The theme of this year’s International Development Week—“leave no one behind”—expresses the global goals laid out in the Sustainable Development Goals (SDGs).
What does this call to “leave no one behind” really mean?
When I hear this phrase I am encouraged to think about how the most vulnerable and marginalised within communities can have opportunities to support themselves and their families. Sometimes new initiatives or technologies that are meant to help the poor aren’t actually accessible for the most vulnerable; they can’t necessarily afford to take the risks associated with something new and unknown.
The community-driven approach of savings groups, on the other hand, targets the most vulnerable and offers a low risk way to access capital. Those who face extreme poverty don’t need to be “left behind” in access to banking, and women don’t need to be “left behind” in earning an income and making decisions about household spending.