I have been working in international development for almost half a century.

I started in my twenties, bringing village leaders together in Ecuador to define how they were to secure their land under the agrarian reform law. In my thirties, I intro­duced solidarity group lending to Accion, leading to the com­mercialization of microfinance.

In all these endeavors, the underlying theme has been the same—providing a simple structure to help people take charge of their future. I have been both amazed and humbled by the energy and commitment of those we serve when they are in charge and we get out of their way.

The savings group experience gives us room to hope that the seemingly intractable problems of poverty can be addressed on a scale that makes a difference. I am by no means suggesting that savings groups are sufficient for development.

Access to rule of law, institutional financial services, basic ser­vices, education, roads, and markets are all necessary—but savings groups are perhaps the best and most practical place to begin.

In all my life’s work, I have found that people have a com­mon desire to join together to support one another in gain­ing more control over their lives. There is one truth that has been consistent—development must be “in their own hands.”

In their book, The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers, authors Paul Polak and Mal Warwick suggest, “To meet the biggest challenge in development—scale — your enterprise must aim to transform the lives of 5 million customers in the first five years and 100 million during the first ten.”⁹ Savings group initiatives increased their outreach from one million to ten million members in just six years.

The remarkable difference with savings groups is in how they are able to achieve this growth—not through build­ing financial institutions as microfinance and credit unions have done or by producing and selling “relentlessly afford­able” products, as Polak and Warwick suggest, but by cata­lyzing the problem-solving capacity of the poor. Practitioner organizations provide the simple savings group structure and transitory support. The members do the work of choosing members, electing officers, writing bylaws, mobilizing their group’s fund, and issuing and collecting on loans; they take it on themselves to spread the message of savings groups within their own and neighboring villages.

Villagers join savings groups because they make their lives better. Beyond providing essential financial services that increase community resilience and reduce the effects of shocks, these groups are beginning to serve as platforms for a variety of community and economic development programs. Some groups will initiate their own projects or reach out to the government and international and local NGOs for help in building wells, schools, health posts, and roads, and the effects of the groups are being multiplied as the leaders of established groups train new ones.

Given the instability and weak institutions of the poor­est countries, the fact that these groups have proved to be extraordinarily robust is yet another reason for supporting their expansion. In Mali, despite a coup, an insurgency in the north, a severe drought, an influx of refugees, skyrocketing food prices, limited opportunities for work outside the vil­lage, and faltering institutions, few Saving for Change groups have disbanded, while many new groups have been trained by volunteers.¹⁰ Similarly, groups in Zimbabwe survived hyper­inflation,¹¹ and groups in Nepal thrived after the withdrawal of outside support and a Maoist takeover of the region.¹² This is a testament to the power of local ownership and control that underpins the savings group approach.

Savings groups cannot solve all households’ problems, but villagers generally join these groups because they work. In a separate study of savings groups programs across Oxfam America, Freedom from Hunger, CARE, and CRS, research­ers found:¹³

• 89 percent of the groups were still saving and lending.

• The total assets of each group—savings, interest, fines—more than doubled.

• 85 percent of the groups’ funds were on loan to members.

• When the fund was divided, each member received an equivalent of $1.38 for every dollar the member saved. Instead of paying interest to financial institu­tions or moneylenders, they had paid themselves.

The same study showed that self-replication is occurring at staggering rates. For every staff-trained group, two more groups were established by copying what they had seen other groups do or with the help of leaders from established groups. Word-of-mouth replication had effectively reduced the cost of training a group from $400 to $133, with this cost poised to decline even further as volunteers train more groups in the years to come.¹⁴

Evidence from savings group programs in Uganda,¹⁵ Zan­zibar,¹⁶ Nepal,¹⁷ Ecuador,¹⁸ and Guatemala¹⁹ documents a similar pattern of viral replication. This should not be sur­prising; ROSCAs—whether they are called tontines, Susus, merry-go-rounds, tandas, or chit funds—spread from village to village before roads and mass communication, and certainly before development workers like us.