Expanding Outreach to Fifty Million Group Members
At the SG 2013 savings group conference in March 2013, in Washington, DC, the major savings group practitio- ners—Oxfam America, Freedom from Hunger, CARE, CRS, Plan International, and the Aga Khan Foundation—presented their “50 million by 2020” vision statement.20 The advisory committee concluded that savings groups had the potential to become a major source, if not the major source, for financial inclusion in the world’s poorest countries.
On reaching the target of fifty million members, savings groups will be saving and distributing more than one billion dollars ($500 per group) of their own money every year. The majority of those who benefit will be those living on less than $2 per day, with a majority living on less than a dollar per day. This population has been nearly impossible to reach with any level of success through traditional financial institutions, except in densely populated Bangladesh, India, and Indonesia.The cost of growing savings groups to fifty million members is modest indeed:
• $1,000 to $1,500 per village
• $5 million to introduce savings groups to three thousand villages with a quarter of a million members
• $150 million per year over seven years to meet the fifty million group member target
The cost for training a group is trending downward. Jong-Hyon Shin, a student of mine from Brandeis University working in the Dominican Republic, is able to train savings groups through single two-hour simulations.21 CRS is expanding its Private Sector Provider model, which pays local agents by the groups they train, further reducing the cost of expanding the program.22 Freedom from Hunger is using low-cost mobile phones loaded with animated pictorial guides to help volunteers train groups and provide business education, which lessens costs as well. Simple applications are being tested to automate record keeping,23 and in high-crime slums, members send their savings to the group treasurer via cell phone and groups send their extra cash to banks for safe keeping electronically.24
With the simple model described in this book, groups are trained quickly and operate well on their own.
When we add complexity—matching funds, elaborate record keeping, or handouts—we unwittingly create dependency and undercut word-of-mouth replication, the essence of “in their own hands” development.The stakes are high. Development has been a failure in large part, with hundreds of billions of dollars misspent. We throw the driver in the back seat and take over. Staff-intensive and costly interventions, will never serve more than a small percentage of the truly poor — that is, if they work at all. By promoting simple ideas—savings groups are only one of them—we can, to use Oxfam’s term, “right the wrong.”
The strategy of savings groups is based on awareness that good ideas spread as they always have: through talking with neighbors and helping one another. We will judge ourselves successful when development passes from our hands to theirs. Few will be lifted out of poverty, but the harshness of living on the edge will have been lessened, and that in itself is a major achievement. As I observe savings groups, I wonder what lessons the gaggle of children intently observing each meeting absorb as they watch their mothers undertake the revolutionary act of taking charge of their future.