Let’s look before we leap: challenging our ideas on how savings groups work
What assumptions do savings group advocates and practitioners hold about how groups work, and are they justified? As NGOs promote ever more savings groups, they cite a list of benefits: access to funds for emergencies and investments, profits on savings, and strengthened social ties. At the same time, they generally follow a set of ‘golden rules’: pay out annually, charge interest, and target women. Yet the benefits are only realized when a number of factors fall into place, and the rules don’t always make sense in different contexts. Savvy promoters and groups are already questioning these assumptions and adapting policies to better meet their needs; more could do so. In this paper we question some pervasive assumptions about savings groups. We provide counter-examples and lessons learned from our own experiences, those of others in the field, and published literature, in hopes of encouraging practitioners to examine these assumptions in their own contexts.Amiry, Q. (2010) ‘Chai wa paisa’ (‘Tea with money’), Student Paper Series, The Fletcher School, Tufts University, Medford MA.
Bankable Frontier Associates (BFA) (2014) Outcompeting the Lockbox: Linking Savings Groups to the Formal Financial Sector [pdf], Focus Note 1 <https://www.mangotree.org/Resource/Outcompeting-the-Lockbox-Linking-Savings-Groups-to-the-Formal-Financial-Sector> [accessed 21 November 2018].
Bureau of Applied Research in Anthropology (BARA) and Innovations for Poverty Action (IPA) (2010) Baseline Study of Saving for Change in Mali: Results from the Segou Expansion Zone and Existing SfC Site [pdf], Bureau of Applied Research in Anthropology, University of Arizona and Innovation for Poverty Action <https://www.freedomfromhunger.org/sites/default/files/SfC_BARA-IPA_Baseline_Final_21Apr2010.pdf> [accessed 21 November 2018].
BARA and IPA (2013) Final Impact Evaluation of the Saving for Change Program in Mali, 2009–2012 [pdf], Bureau of Applied Research in Anthropology, University of Arizona and Innovations for Poverty Action <https://www.freedomfromhunger.org/sites/default/files/SavingforChangeMaliResearchFullReportMay2013.pdf> [accessed 21 November 2018].
Frangos, A. (2011) ‘Mapping the tanda in the US: cells of savings security’, Savings Revolution [blog] <http://savings-revolution.com/doclib/> [accessed 21 November 2018].
Gash, M. (2017) Understanding the Impact of Savings Groups [pdf], Learning Brief, Arlington, VA: SEEP Network <https://seepnetwork.org/files/galleries/Understanding.pdf> [accessed 21 November 2018].
Gash, M. and Odell, K. (2013) The Evidence-based Story of Savings Groups: A Synthesis of Seven Randomized Control Trials, The SEEP Network, Arlington, VA.
Jahns, E. (2014) Savings Groups, Shocks and Coping Strategies: The Case of Poor Rural Households in El Salvador, doctoral dissertation, The Fletcher School, Tufts University, Medford, MA.
McMahon, C. (2012) ‘Saving a peace: How savings groups build peace’, unpublished.
The Mango Tree (2018) ‘What are savings groups?’ [online] <https://www.mangotree.org/what-are-savings-groups> [accessed 21 November 2018].
Marx, M. and Chhim, V. (2015) Community-based Finance in Cambodia: A Comparative Study of Savings and Credit Models for Community Development, Food and Agriculture Organization of the United Nations, Phnom Penh and Rome.
Matthews, B. and Narasimhan, K. (2015) Balance or Break? Charting a Course for Savings Group Sustainability, Focus Note, Pacific Financial Inclusion Programme, Suva.
Mayoux, L. and Hartl, M. (2009) Gender and Rural Microfinance: Reaching and Empowering Women, International Fund for Agricultural Development, Rome.
Rahman, A. (1999) ‘Micro-credit initiatives for equitable and sustainable development: who pays?’ World Development 27: 67–82.
Rutherford, S. and Vander Meer, P. (2014) ‘ROSCAs on the rebound’, Center for Financial Inclusion, 17 November 2014 [blog] <https://www.centerforfinancialinclusion.org/roscas-on-the-rebound> [accessed 21 November 2018].
Shipton, P. (1990) How Gambians Save – and What Their Strategies Imply for International Aid, Washington, DC: World Bank.
Wilson, K. (2009) Pray for Money, Working Paper, Feinstein International Center, Tufts University, Medford MA.
Wilson, K. (2013) ‘Thrift-led development’, in C. Nelson (ed.), Savings Groups at the Frontier, Practical Action Publishing, Rugby.
Wilson, K., Harper, M. and Griffith, M. (eds) (2010) Financial Promise for the Poor: How Groups Build Microsavings, Kumarian Press, Sterling VA.
Zollmann, J. (2010) Waiting for Rain, Reaching for Mangoes: The Origins, Evolution and Roles of Savings Groups in Rural Swaziland, Student Research Series, Center for Emerging Markets Enterprises, The Fletcher School, Tufts University, Medford MA.
Zollmann, J., Hassan, M., Wanjala, C. and Gachoka, A. (2013) The Financial Role of Savings Groups: Preliminary Findings from the Kenya Financial Diaries, Bankable Frontier Associates, Somerville MA.
Amiry, Q. (2010) ‘Chai wa paisa’ (‘Tea with money’), Student Paper Series, The Fletcher School, Tufts University, Medford MA.
Bankable Frontier Associates (BFA) (2014) Outcompeting the Lockbox: Linking Savings Groups to the Formal Financial Sector [pdf], Focus Note 1 <https://www.mangotree.org/Resource/Outcompeting-the-Lockbox-Linking-Savings-Groups-to-the-Formal-Financial-Sector> [accessed 21 November 2018].
Bureau of Applied Research in Anthropology (BARA) and Innovations for Poverty Action (IPA) (2010) Baseline Study of Saving for Change in Mali: Results from the Segou Expansion Zone and Existing SfC Site [pdf], Bureau of Applied Research in Anthropology, University of Arizona and Innovation for Poverty Action <https://www.freedomfromhunger.org/sites/default/files/SfC_BARA-IPA_Baseline_Final_21Apr2010.pdf> [accessed 21 November 2018].
BARA and IPA (2013) Final Impact Evaluation of the Saving for Change Program in Mali, 2009–2012 [pdf], Bureau of Applied Research in Anthropology, University of Arizona and Innovations for Poverty Action <https://www.freedomfromhunger.org/sites/default/files/SavingforChangeMaliResearchFullReportMay2013.pdf> [accessed 21 November 2018].
Frangos, A. (2011) ‘Mapping the tanda in the US: cells of savings security’, Savings Revolution [blog] <http://savings-revolution.com/doclib/> [accessed 21 November 2018].
Gash, M. (2017) Understanding the Impact of Savings Groups [pdf], Learning Brief, Arlington, VA: SEEP Network <https://seepnetwork.org/files/galleries/Understanding.pdf> [accessed 21 November 2018].
Gash, M. and Odell, K. (2013) The Evidence-based Story of Savings Groups: A Synthesis of Seven Randomized Control Trials, The SEEP Network, Arlington, VA.
Jahns, E. (2014) Savings Groups, Shocks and Coping Strategies: The Case of Poor Rural Households in El Salvador, doctoral dissertation, The Fletcher School, Tufts University, Medford, MA.
McMahon, C. (2012) ‘Saving a peace: How savings groups build peace’, unpublished.
The Mango Tree (2018) ‘What are savings groups?’ [online] <https://www.mangotree.org/what-are-savings-groups> [accessed 21 November 2018].
Marx, M. and Chhim, V. (2015) Community-based Finance in Cambodia: A Comparative Study of Savings and Credit Models for Community Development, Food and Agriculture Organization of the United Nations, Phnom Penh and Rome.
Matthews, B. and Narasimhan, K. (2015) Balance or Break? Charting a Course for Savings Group Sustainability, Focus Note, Pacific Financial Inclusion Programme, Suva.
Mayoux, L. and Hartl, M. (2009) Gender and Rural Microfinance: Reaching and Empowering Women, International Fund for Agricultural Development, Rome.
Rahman, A. (1999) ‘Micro-credit initiatives for equitable and sustainable development: who pays?’ World Development 27: 67–82.
Rutherford, S. and Vander Meer, P. (2014) ‘ROSCAs on the rebound’, Center for Financial Inclusion, 17 November 2014 [blog] <https://www.centerforfinancialinclusion.org/roscas-on-the-rebound> [accessed 21 November 2018].
Shipton, P. (1990) How Gambians Save – and What Their Strategies Imply for International Aid, Washington, DC: World Bank.
Wilson, K. (2009) Pray for Money, Working Paper, Feinstein International Center, Tufts University, Medford MA.
Wilson, K. (2013) ‘Thrift-led development’, in C. Nelson (ed.), Savings Groups at the Frontier, Practical Action Publishing, Rugby.
Wilson, K., Harper, M. and Griffith, M. (eds) (2010) Financial Promise for the Poor: How Groups Build Microsavings, Kumarian Press, Sterling VA.
Zollmann, J. (2010) Waiting for Rain, Reaching for Mangoes: The Origins, Evolution and Roles of Savings Groups in Rural Swaziland, Student Research Series, Center for Emerging Markets Enterprises, The Fletcher School, Tufts University, Medford MA.
Zollmann, J., Hassan, M., Wanjala, C. and Gachoka, A. (2013) The Financial Role of Savings Groups: Preliminary Findings from the Kenya Financial Diaries, Bankable Frontier Associates, Somerville MA.
Amiry, Q. (2010) ‘Chai wa paisa’ (‘Tea with money’), Student Paper Series, The Fletcher School, Tufts University, Medford MA.
Bankable Frontier Associates (BFA) (2014) Outcompeting the Lockbox: Linking Savings Groups to the Formal Financial Sector [pdf], Focus Note 1 <https://www.mangotree.org/Resource/Outcompeting-the-Lockbox-Linking-Savings-Groups-to-the-Formal-Financial-Sector> [accessed 21 November 2018].
Bureau of Applied Research in Anthropology (BARA) and Innovations for Poverty Action (IPA) (2010) Baseline Study of Saving for Change in Mali: Results from the Segou Expansion Zone and Existing SfC Site [pdf], Bureau of Applied Research in Anthropology, University of Arizona and Innovation for Poverty Action <https://www.freedomfromhunger.org/sites/default/files/SfC_BARA-IPA_Baseline_Final_21Apr2010.pdf> [accessed 21 November 2018].
BARA and IPA (2013) Final Impact Evaluation of the Saving for Change Program in Mali, 2009–2012 [pdf], Bureau of Applied Research in Anthropology, University of Arizona and Innovations for Poverty Action <https://www.freedomfromhunger.org/sites/default/files/SavingforChangeMaliResearchFullReportMay2013.pdf> [accessed 21 November 2018].
Frangos, A. (2011) ‘Mapping the tanda in the US: cells of savings security’, Savings Revolution [blog] <http://savings-revolution.com/doclib/> [accessed 21 November 2018].
Gash, M. (2017) Understanding the Impact of Savings Groups [pdf], Learning Brief, Arlington, VA: SEEP Network <https://seepnetwork.org/files/galleries/Understanding.pdf> [accessed 21 November 2018].
Gash, M. and Odell, K. (2013) The Evidence-based Story of Savings Groups: A Synthesis of Seven Randomized Control Trials, The SEEP Network, Arlington, VA.
Jahns, E. (2014) Savings Groups, Shocks and Coping Strategies: The Case of Poor Rural Households in El Salvador, doctoral dissertation, The Fletcher School, Tufts University, Medford, MA.
McMahon, C. (2012) ‘Saving a peace: How savings groups build peace’, unpublished.
The Mango Tree (2018) ‘What are savings groups?’ [online] <https://www.mangotree.org/what-are-savings-groups> [accessed 21 November 2018].
Marx, M. and Chhim, V. (2015) Community-based Finance in Cambodia: A Comparative Study of Savings and Credit Models for Community Development, Food and Agriculture Organization of the United Nations, Phnom Penh and Rome.
Matthews, B. and Narasimhan, K. (2015) Balance or Break? Charting a Course for Savings Group Sustainability, Focus Note, Pacific Financial Inclusion Programme, Suva.
Mayoux, L. and Hartl, M. (2009) Gender and Rural Microfinance: Reaching and Empowering Women, International Fund for Agricultural Development, Rome.
Rahman, A. (1999) ‘Micro-credit initiatives for equitable and sustainable development: who pays?’ World Development 27: 67–82.
Rutherford, S. and Vander Meer, P. (2014) ‘ROSCAs on the rebound’, Center for Financial Inclusion, 17 November 2014 [blog] <https://www.centerforfinancialinclusion.org/roscas-on-the-rebound> [accessed 21 November 2018].
Shipton, P. (1990) How Gambians Save – and What Their Strategies Imply for International Aid, Washington, DC: World Bank.
Wilson, K. (2009) Pray for Money, Working Paper, Feinstein International Center, Tufts University, Medford MA.
Wilson, K. (2013) ‘Thrift-led development’, in C. Nelson (ed.), Savings Groups at the Frontier, Practical Action Publishing, Rugby.
Wilson, K., Harper, M. and Griffith, M. (eds) (2010) Financial Promise for the Poor: How Groups Build Microsavings, Kumarian Press, Sterling VA.
Zollmann, J. (2010) Waiting for Rain, Reaching for Mangoes: The Origins, Evolution and Roles of Savings Groups in Rural Swaziland, Student Research Series, Center for Emerging Markets Enterprises, The Fletcher School, Tufts University, Medford MA.
Zollmann, J., Hassan, M., Wanjala, C. and Gachoka, A. (2013) The Financial Role of Savings Groups: Preliminary Findings from the Kenya Financial Diaries, Bankable Frontier Associates, Somerville MA.
Amiry, Q. (2010) ‘Chai wa paisa’ (‘Tea with money’), Student Paper Series, The Fletcher School, Tufts University, Medford MA.
Bankable Frontier Associates (BFA) (2014) Outcompeting the Lockbox: Linking Savings Groups to the Formal Financial Sector [pdf], Focus Note 1 <https://www.mangotree.org/Resource/Outcompeting-the-Lockbox-Linking-Savings-Groups-to-the-Formal-Financial-Sector> [accessed 21 November 2018].
Bureau of Applied Research in Anthropology (BARA) and Innovations for Poverty Action (IPA) (2010) Baseline Study of Saving for Change in Mali: Results from the Segou Expansion Zone and Existing SfC Site [pdf], Bureau of Applied Research in Anthropology, University of Arizona and Innovation for Poverty Action <https://www.freedomfromhunger.org/sites/default/files/SfC_BARA-IPA_Baseline_Final_21Apr2010.pdf> [accessed 21 November 2018].
BARA and IPA (2013) Final Impact Evaluation of the Saving for Change Program in Mali, 2009–2012 [pdf], Bureau of Applied Research in Anthropology, University of Arizona and Innovations for Poverty Action <https://www.freedomfromhunger.org/sites/default/files/SavingforChangeMaliResearchFullReportMay2013.pdf> [accessed 21 November 2018].
Frangos, A. (2011) ‘Mapping the tanda in the US: cells of savings security’, Savings Revolution [blog] <http://savings-revolution.com/doclib/> [accessed 21 November 2018].
Gash, M. (2017) Understanding the Impact of Savings Groups [pdf], Learning Brief, Arlington, VA: SEEP Network <https://seepnetwork.org/files/galleries/Understanding.pdf> [accessed 21 November 2018].
Gash, M. and Odell, K. (2013) The Evidence-based Story of Savings Groups: A Synthesis of Seven Randomized Control Trials, The SEEP Network, Arlington, VA.
Jahns, E. (2014) Savings Groups, Shocks and Coping Strategies: The Case of Poor Rural Households in El Salvador, doctoral dissertation, The Fletcher School, Tufts University, Medford, MA.
McMahon, C. (2012) ‘Saving a peace: How savings groups build peace’, unpublished.
The Mango Tree (2018) ‘What are savings groups?’ [online] <https://www.mangotree.org/what-are-savings-groups> [accessed 21 November 2018].
Marx, M. and Chhim, V. (2015) Community-based Finance in Cambodia: A Comparative Study of Savings and Credit Models for Community Development, Food and Agriculture Organization of the United Nations, Phnom Penh and Rome.
Matthews, B. and Narasimhan, K. (2015) Balance or Break? Charting a Course for Savings Group Sustainability, Focus Note, Pacific Financial Inclusion Programme, Suva.
Mayoux, L. and Hartl, M. (2009) Gender and Rural Microfinance: Reaching and Empowering Women, International Fund for Agricultural Development, Rome.
Rahman, A. (1999) ‘Micro-credit initiatives for equitable and sustainable development: who pays?’ World Development 27: 67–82.
Rutherford, S. and Vander Meer, P. (2014) ‘ROSCAs on the rebound’, Center for Financial Inclusion, 17 November 2014 [blog] <https://www.centerforfinancialinclusion.org/roscas-on-the-rebound> [accessed 21 November 2018].
Shipton, P. (1990) How Gambians Save – and What Their Strategies Imply for International Aid, Washington, DC: World Bank.
Wilson, K. (2009) Pray for Money, Working Paper, Feinstein International Center, Tufts University, Medford MA.
Wilson, K. (2013) ‘Thrift-led development’, in C. Nelson (ed.), Savings Groups at the Frontier, Practical Action Publishing, Rugby.
Wilson, K., Harper, M. and Griffith, M. (eds) (2010) Financial Promise for the Poor: How Groups Build Microsavings, Kumarian Press, Sterling VA.
Zollmann, J. (2010) Waiting for Rain, Reaching for Mangoes: The Origins, Evolution and Roles of Savings Groups in Rural Swaziland, Student Research Series, Center for Emerging Markets Enterprises, The Fletcher School, Tufts University, Medford MA.
Zollmann, J., Hassan, M., Wanjala, C. and Gachoka, A. (2013) The Financial Role of Savings Groups: Preliminary Findings from the Kenya Financial Diaries, Bankable Frontier Associates, Somerville MA.
Can microsavings work without microcredit? A case study of India Post Payments Bank
Ashta, Arvind
Pillarisetti, Satish
Strategic Change, Vol. 29 (2020), Iss. 3 P.331
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