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SAVING FOR CHANGE<br />Mass Sale, Group Managed Microfinance for the Rural Poor<br />Microcredit Summit Nairobi <br />Apri...
CHALLENGE OF REACHING THE POOREST<br />Microfinance a success <br />150 million worldwide <br />But:<br />80% or more not ...
Saving for Change Reaches those Left Out (Focus/Scale/Impact)<br />Starts with saving<br />Highly profitable (for members)...
CREDIT LED MICROFINANCE<br />Microfinance Institution<br />Bank<br />Credit Union<br />Loan<br />Loan with Interest<br />B...
$<br />SAVE<br />
$ <br />BORROW<br />
SAVE AND REPAY<br />$ <br />+ <br />$<br />
$<br />DISTRIBUTE FUNDS at END OF CYCLE<br />
GROUP LEADERS CREATE NEW GROUPS<br />$<br />$ <br />+ <br />$<br />Group 1<br />Group 2<br />
UNDERLYING PRINCIPLES<br />Surprising Findings:<br /><ul><li>Poor not “too poor to save” but </li></ul>  their savings los...
85% of fund on loan
Model virtually fraud proof
Robust groups survive crisis</li></li></ul><li>543,000<br />316,219<br />Increase in membership in 5 years<br />
SfC Model<br />Current Savings lose 20% per year<br />Current Lending Costs money<br />Home<br />Animals<br />Jewelry<br /...
Mali: Chronic Food Insecurity<br />Mali 171 of 173 HDI<br />1/3 rural households food insecure<br />58% of rural household...
SAVING FOR CHANGE CREATED A <br />NEW MARKET FOR MF IN MALI<br /><ul><li>10% had MFI or Credit union loan (In new areas < 1%)
19% members of tontines (ROSCAS)
Now 80% to 90%have access to improved financial services in a village within two years</li></li></ul><li>Mali Snapshot<br ...
WHAT MEMBERS VALUE MOST<br />
Member Satisfaction with SfC<br />
 SfC Impact on Food Security<br />Opens investment opportunities in trading and agriculture<br />With more business more m...
Social Impact<br />Extends women’s social networks<br />Empowerment<br />Increased women’s’ role in the community<br />Inc...
Group Assets<br />$<br />power<br />Household<br />Change<br />Village<br />
To sum up<br />Saving for Change will not “eradicate poverty,” drought and declining soil quality, endemic malaria and lac...
To Introduce SfC to New Region over Three Years<br />With $400,000 investment ($25 per member)<br />300 villages with SfC<...
To Introduce SfC to New Region over Three Years<br />With $400,000 investment ($25 per member)<br />300 villages with SfC<...
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AMERMS Course 8: Entering the Field - PPT 3

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FULL TITLE:
Entering the Field: Learning the Basics of Starting a Microfinance Program
ROOM: Tsavo B
Facilitated by Oxfam America:
Mr. Jeff Ashe (USA)
Mr. Soumaila Sogoba (Mali)

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AMERMS Course 8: Entering the Field - PPT 3

  1. 1. SAVING FOR CHANGE<br />Mass Sale, Group Managed Microfinance for the Rural Poor<br />Microcredit Summit Nairobi <br />April 10, 2010<br />
  2. 2. CHALLENGE OF REACHING THE POOREST<br />Microfinance a success <br />150 million worldwide <br />But:<br />80% or more not reached<br />rural poor largely left out<br />Because:<br />Delivery costs too high<br />Credit needs too small<br />Only 1/5 need credit<br />All need savings<br />
  3. 3. Saving for Change Reaches those Left Out (Focus/Scale/Impact)<br />Starts with saving<br />Highly profitable (for members) <br />Vast scale <br />Simple/Low cost <br />Builds on local capacity/knowledge<br />Delivery by NGOs<br />Self-replicating<br /> Survives<br />No external fund<br />Constant learning<br />
  4. 4. CREDIT LED MICROFINANCE<br />Microfinance Institution<br />Bank<br />Credit Union<br />Loan<br />Loan with Interest<br />Borrower<br />
  5. 5. $<br />SAVE<br />
  6. 6. $ <br />BORROW<br />
  7. 7. SAVE AND REPAY<br />$ <br />+ <br />$<br />
  8. 8. $<br />DISTRIBUTE FUNDS at END OF CYCLE<br />
  9. 9. GROUP LEADERS CREATE NEW GROUPS<br />$<br />$ <br />+ <br />$<br />Group 1<br />Group 2<br />
  10. 10. UNDERLYING PRINCIPLES<br />Surprising Findings:<br /><ul><li>Poor not “too poor to save” but </li></ul> their savings lose value <br /><ul><li>Enough savings among members </li></ul> for most needs<br />Findings:<br /><ul><li>Very few groups disband
  11. 11. 85% of fund on loan
  12. 12. Model virtually fraud proof
  13. 13. Robust groups survive crisis</li></li></ul><li>543,000<br />316,219<br />Increase in membership in 5 years<br />
  14. 14. SfC Model<br />Current Savings lose 20% per year<br />Current Lending Costs money<br />Home<br />Animals<br />Jewelry<br />Tontines<br />Remittances<br />Money Lenders<br />Suppliers<br />MFIs<br />
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  16. 16. Mali: Chronic Food Insecurity<br />Mali 171 of 173 HDI<br />1/3 rural households food insecure<br />58% of rural households below $1 per day<br />28% villages food crisis<br />Average SfC group member <br />Illiterate woman<br />Had malaria past year<br />5 children<br />Hungry part of the year<br />
  17. 17. SAVING FOR CHANGE CREATED A <br />NEW MARKET FOR MF IN MALI<br /><ul><li>10% had MFI or Credit union loan (In new areas < 1%)
  18. 18. 19% members of tontines (ROSCAS)
  19. 19. Now 80% to 90%have access to improved financial services in a village within two years</li></li></ul><li>Mali Snapshot<br />22 <br />Members<br />$312<br />Total group <br />Fund (26% returned as dividends)<br />$15.<br />Size of average loan<br />(Most $5 to $50)<br />99.8%<br />Loan repayment rate<br />
  20. 20. WHAT MEMBERS VALUE MOST<br />
  21. 21. Member Satisfaction with SfC<br />
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  27. 27. SfC Impact on Food Security<br />Opens investment opportunities in trading and agriculture<br />With more business more money more food available and more money to buy it. <br />When fund divided often used for food and seeds<br />Less short term fluctuations in Income/reduces risks<br />Reaches the poorest/ women heads of household<br />With more prosperity less need to migrate<br />Many groups purchase grain to use and resell during the hungry season<br />Hunger now less likely<br />
  28. 28. Social Impact<br />Extends women’s social networks<br />Empowerment<br />Increased women’s’ role in the community<br />Increases confidence, leadership<br />Enhanced cooperation, mutual assistance, and solidarity among members and communities. <br />Enhanced a “woman’s ability to manage her nuclear sub-unit of the household”. <br />Less stress and increased family harmony<br />Helps households headed by women, a growing trend in Mali, are also benefiting from the program. <br />. <br /> <br />
  29. 29. Group Assets<br />$<br />power<br />Household<br />Change<br />Village<br />
  30. 30. To sum up<br />Saving for Change will not “eradicate poverty,” drought and declining soil quality, endemic malaria and lack of markets and infrastructure also factor in, but the lives of women members and their families have improved.<br />Saving for Change provides a more stable platform that allows for the accumulation of assets and reduces the need to sell assets in emergencies. SfC is a key leverage point to promote sustainable development in vulnerable villages.<br />
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  42. 42. To Introduce SfC to New Region over Three Years<br />With $400,000 investment ($25 per member)<br />300 villages with SfC<br />800 groups, 16,000 members<br />Includes:<br />Local partner costs<br />Costs of NGO selection, training, supervision, monitoring and evaluation<br />
  43. 43. To Introduce SfC to New Region over Three Years<br />With $400,000 investment ($25 per member)<br />300 villages with SfC<br />800 groups, 16,000 members<br />Includes:<br />Local partner costs<br />Costs of NGO selection, training, supervision, monitoring and evaluation<br />
  44. 44. How it Works<br />NGO team of ten animators and coordinator recruited and trained<br />Each animator assigned 30 villages<br />Over three years each animator trains one groups in twenty villages<br />In each village trains one to three replicating agents who train rest of groups in the village<br />Over three years animators train 200 groups, replicating agents train 600 groups<br />Replicating agents train/support additional groups in future.<br />
  45. 45. Following Procedure insures Quality at Low Cost<br />Careful selection of partners<br />Joint hiring of coordinator and animators<br />Tight MIS<br />Simple manuals<br />Clear ambitious performance expectations<br />Constant learning and improvement<br />Oxfam America has SfC teams in Senegal/Mali,<br />Cambodia, El Salvador to provide this <br />assistance.<br />
  46. 46. How much does it cost? For five million dollars:<br />2,500 villages ($2,000 per village)<br />200,000 group members<br />10,000 groups<br />Four to five years<br />Sufficient “critical mass” to attract more donors/government. <br />Potential demand 40,000 to 50,000 groups in country of 10 to 15 million inhabitants<br />A mass scale/low cost/locally controlled/locally financed <br />strategy for food security is the key <br />

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