Evaluating how Saving for Change groups increase women’s access to credit and helps them invest in their agricultural activities.
Traditional community methods of saving, such as ROSCAS (Revolving Savings and Credit Associations, called tontines in Mali), offer tools to rural villages in which access to financial services is limited. However these groups, operating at the village level in many African, Asian, and Latin American villages, tend to be poorly organized, often lack in transparency, and are subject to misuse. In addition, ROSCAs do not provide a means for borrowing at will because although each member makes a regular deposit to the common fund, only one lottery-selected member is able to keep the proceeds from each meeting.
Community savings groups attempt to overcome the difficulties of the ROSCA model by creating groups of people who can pool their savings in order to have a source of lending funds. Members make savings contributions to the pool, and can also borrow from it. As a self-sustainable and self-replicating mechanism, these savings groups have the potential to reach more remote areas, but it remains to be seen what their impacts will be.
In the rural region of Segou, Mali, the economy is mainly based on subsistence agriculture, with a small presence of commerce and fishing. Principal farm products such as millet, sorghum, rice, and maize are used by households as the main source of consumption and income. With a lack of financial means to hire labor and buy inputs to grow cereals, women’s economic activities are mainly dominated by the production of groundnuts and gardening products and by the making of shea butter. Some women participate in tontines, informal ROSCA groups. However, these groups do not offer loan services, and so new programs, such as the “Savings for Change” program championed by Oxfam America and Freedom from Hunger, are being introduced in the area.
Description of Intervention:
Locally known as Épargner pour le Changement, the Saving for Change methodology is a new form of community savings program which integrates self-managed saving and lending groups with education sessions. Five hundred villages in the Segou region of Mali were selected to participate in the study, and the program is being offered to a random sample of half of the villages. Field agents from local partner NGOs present the concept to village leaders and train self-selected groups of about 20 women each on how to manage their meetings. Group members save a set amount each week and can benefit from short term loans from the group savings fund. Loans are paid back with interest, allowing the fund to accumulate capital both from the weekly contributions and from interest payments. After a pre-determined period members divide the group fund in proportion to their weekly contributions.
For about a year, a field agent provides technical assistance to the newly-formed groups. During the first three months, the agent visits the group once a week, which is followed by a bi-weekly visit for another three months, during which the agent also introduces malaria education, as group meetings are also a space for discussion of community issues and education sessions. During the last six months of the training, the field agent shows up only once a month to monitor groups. A memory-based, oral record-keeping system has been designed for groups to manage meetings autonomously and to ensure transparency.
Program growth is accelerated by training group members who volunteer to start new Saving for Change groups themselves. In order to test the effectiveness of different implementation strategies, we compare two methods for training village replicator agents. In some randomly selected villages, field agents give replicators a pictorial manual and a formal three-day training on how to start and manage groups. In other villages the replicator agents receive no formal training, reducing program costs.