-
-
Let’s look before we leap: challenging our ideas on how savings groups work
01.09.2018
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. -
Community-based financial services: a spectrum of providers
01.06.2013
In recent years, stakeholders have increasingly acknowledged that formal financial institutions are not always able to address the financial service needs of the very poor, particularly those living in remote areas. Small transaction sizes, sparse populations, and poor infrastructure limit the ability of commercial banks and others to reach rural areas where many of the world's poorest and most marginalized populations live. This paper explores the experience in Tajikistan, where a number of different types of financial service providers and civil society organizations play an important role in meeting a variety of financial service needs and market segments. It proposes that in order to increase financial inclusion, community-based providers and collective organizations are necessary to overcome high costs and cumbersome procedures required by regulated providers and thereby contribute to the development of the financial system.