2. What does SaveAct do?
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
A stepped-approach, with self-selection ‘filters’:
Channelling human capital
Mobilisation of
Savings & Credit
Groups:
• Savings as a ‘glue’
stimulating social
capital
• Social fund
• Platform for
efficient & effective
support strategies
Savings & Credit
Life skills training
& financial
education
• Enhances
awareness of risks &
opportunities
• Economic literacy
• Improved coping
strategies
• Consumption
smoothing
• Improved capacity
to take risk
Enterprise
development
• Stimulates
formation of
enterprises
• Incubated in
savings groups &
commodity
investment groups
• Fed by savings &
credit, share-outs,
Isiqalo Training
• Improved
capacity for self-
reliant action
People
choose to
participate
in a
structured
process
with
rewards ...
What to do?
Towards more sustainable livelihoods & financial services for the poor
3. How does SaveAct support enterprise
development
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
1. Savings Groups express
interest (2-4 )
- More mature
- Finalised financial education
-Specific interest and groups
(FOs, CBPs)
2. CIG Initiaton process:
- Introduction
-PVCA
- Prioritization of
commodities
(FOs, CBPs EDOs)
3. Commodity Interest Groups
(CIGs) formed
- registration of members- Action
plan developed
-Chronology of intervnetions per
commodity of interest defined
(FOs, CBPs EDOs)
4. Isiqalo (enterprise)
training
Business plans developed
(factoring in share-outs/ loan
capital & collective
opportunity, eg bulk buying)
(EDOs, businses trainers)
5. CIG Activities :
-Input supply, bulk buying
-production support , training
and farmer innovation
-Marketing support; joint
initaitves, innovative ideas,
agribusiness inolvement and
negotiation.
(EDOs , agric trainers)
6. CIGs mentored
- Including bulk buying
- Further business plan mentoring
- Monitoring of individual
pariticipants
-Special interest meetings
-Support for local facilitators
(EDOs research staff, interns, FOs)
4. PVCA: participatory value chain
assessment
• Helps to prioritize commodities of interest for the area based on criteria developed
by participants. Includes local ‘’market assessment”
• People interested in business start up training chosen from these groups –
members belong to a number of local SCGS
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
5. Commodity Interest Groups (CIGs)
• CIGS set up in Matatiele for potatoes, vegetables, maize,
sheep, cattle and pigs
•
Financial Services & Sustainable
Livelihoods for the Poor – Yakha Impilo
engcono ngokulondoloza imali!
Sthathi.
Khubetsoana,
Mpharane,
Moyaneng
Thinana/Ghobo
Khubetsonana,
Mpharane,
Moyaneng
Thafa,
Mehloloaneng,
Nchodu,
Hebron
Lubisini
Conservation
Agriculture
CIGs
6. Scaling out with CIGs
Farmer Centre
– Pontsheng;
inputs, advice,
access to tolos for
sharing, hiring etc
Sekhutlong
-CIG
-CA learning group
-5 new farmer based trials
Mapheng
-CIG
-CA learning group
- 2-3 farmer based trials
Pontsheng
-CIG
-CA learning group
-7 CA farmer mentors 2ndary level
experimentation
- 35 Farmer participants linked to farmer
mentors
Nkau
-CIG
-CA learning group
-CA farmer mentor with 5
farmer volunteers
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
8. Business start up training; Isiqalo
• Linked to the CIGs and commodities
of interest.
• 4 day training leading into CIG process
of mentoring and production support.
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono
ngokulondoloza imali!
Isiqalo training summary (2013) Matatiele Bergville TOTAL
Isiqalo trainee days 102 52 154
Improvement of current business (acc to business
plans submitted)
40 (n=69) 30 70
New businesses (Acc to new business plans
submitted)
16 (n=69) 31 47
Isiqalo themes per training group: Maize 1
Poultry; broiler production 1
Sheep; meat and wool 1
Vegetable production and sheep management 1
Vegetable production and poultry 2
9. Production support
• Training through local and other
specialists e.g pig production
• Mentoring; short and practical
sessions on issues of concern in a
commodity e.g. Grading of wool
for sheep production
• Farmer innovation; tackle a whole
production system and issues of
efficiency ,e.g. Conservation
Agriculture
• Include stakeholders in market
chain e.g. Seed suppliers,
agribusiness (Grain Sa and
Poultry SA)
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono
ngokulondoloza imali!
10. Financial Services & Sustainable
Livelihoods for the Poor – Yakha Impilo
engcono ngokulondoloza imali!
11. Marketing
• Local marketing mainly; Joint discussions around the issues – oversupply
at certain times, developing niches, different types of crop (e.g. different
varieties of potato seed or planting different times,),joint activities such as
joining together for pension days.
• New ideas – e.g. Local milling, production and supply of animal fodder –
different types- teff, lucerne
• Some individual marketing in town, or buyers coming to them.
• Still the best option – becomes more of an issue as production increases
Financial Services & Sustainable
Livelihoods for the Poor – Yakha Impilo
engcono ngokulondoloza imali!
12. Involvement in CIGs; improvements
and issues
Has not
improved
16%
Income
improved
5%
Inputs
cheaper
29%Inputs
easier
to
access
2%
Knowledg
e gained
14%
Markets
found
3%
Other
7%
Productio
n better
19%
Working
together
with
communit
y
members
5%
Business improvement through
involvement in CIGs; Matatiele
N=85
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
Credit
3%
Inputs
25%
Knowledge
1%
Market
4%
No issues
18%
Other
12%
Production
factors
18%
Weather
19%
Present business issues; Matatiele,
N=85
13. Livelihood concerns
• Track the complex
interactions between
multiple and diverse
livelihood activities and
their contribution towards
overall livelihoods
• Track increase in
production, enterprise
activities and income
through involvement in
CIGS
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono
ngokulondoloza imali!
0
2
4
6
8
10
12
14
NumberofPeople
Average Monthly Income
Income Distribution of Respondents ; Bergville N=40
CIG Member
Non-Member
>R6 000
2%
Don't know
2%
R1001-R2000
55%
R1-R500
5%
R2 001-
R3000
17%
R3001-R4000
4%
R4001-R6000
1% R501-
R1000
14%
Income distribution of CIG members in Matatiele
N=100
14. Livelihoods tracking
• E surveys (Dooblo) – for
tracking CIGs, isiqalo and
livelihoods outcomes
• Uploaded and analysed in
Excel
• Individual reports with
photos and GPS points
possible.
• Building up over time –
interview the same people
over time, increase
number of people included
in monitoring, provide
baselines through those
involved in SCGs but not in
CIGS
Financial Services & Sustainable
Livelihoods for the Poor – Yakha Impilo
Maize None Potato Poultry Sheep
Vegetable
s
member 16 1 40 13 2 13
non member 14 1
0
5
10
15
20
25
30
35
40
45
Noofpeopleinvolved Agricultural enterprise involvement; main enterprise
Matatiele N=100
Agricultural
enterprise
CIG member;
Main enterprise
Non
member Total
Single
enterprise
Total no Cig
members involved
in enterprise
Maize 16 16 1 47
None 1 14 15 15
Potato 40 1 41 3 41
Poultry 13 13 11 42
Sheep 2 2 2 12
Vegetables 13 13 8 53
Pigs - - - - 15
Total 85 15 100 25
15. Use of SCG loans for enterprise
development
Agric Enterprise Basic Needs Education
House
Improvements
Non-agricultural
enterprise
Other: start
enterprise
Other: Pay off
debt
Other
Loan 1 17 15 14 16 3 2 2 6
Loan 2 16 17 10 32 2 0 0 3
Loan 3 7 13 5 6 1 0 0 2
Loan 4 1 6 0 1 0 0 0 1
Loan 5 1 4 0 1 0 0 0 0
Total 42 55 29 56 6 2 2 12
% 21% 27% 14% 27% 3% 1% 1% 6%
0
10
20
30
40
50
60
Noofpeople
Use of SCG loans in 2013 cycle; Matatiele
Financial Services & Sustainable
Livelihoods for the Poor – Yakha Impilo
engcono ngokulondoloza imali!
16. Livelihoods cont.: E survey example
Financial Services & Sustainable Livelihoods for the Poor
Question
ID
Question: CIG involvement Answer
50 What activities have you been involved with in your CIG Meetings,Learning
sessions,Implementation,Joint action
51 Describe any new activities you have been involved in CA trial
52 How has your business improved since you have been
involved with the CIGs?
Inputs cheaper, Inputs easier to access,
Production better, Knowledge gained
53 What are your present business issues? Weather, Knowledge, Moles on potatoes
and insect pests
54 What further support would you like to receive? Training on production as well as home
remedies in dealing with pests as chemicals
are expensive and difficult to follow
properly.
17. Livelihoods cont.
Financial Services & Sustainable
Livelihoods for the Poor – Yakha Impilo
engcono ngokulondoloza imali!
Ques
tion
ID
ISIQALO: Question Answer
55 Have you received Isiqalo business
training from SaveAct?
Yes
56 Do you want to receive Isiqalo business
training from SaveAct?
57 In what year did you receive this training? 2012
58 What was the theme of your Isiqalo
training?
Vegetables
59 Would you be interested in repeating the
training or have additional similar training?
Yes
60 Did you fill in a business plan? Yes
61 Why have you decided not to fill in a
business plan?
62 What was the enterprise you filled out the
business plan for?
Vegetables
63 Have you implemented your business
plan?
No
64 Why have you not implemented your
business plan?
She decided not to follow
through vegetables as an
enterprise. Doesn’t see viable
enterprise as yet but thinks
maize may be it, waiting to see
on the performance.
65 What has the income been from THIS
enterprise in the last year?
R 0
66 Please rate the Isiqalo training in terms of
how helpful you found it.
4
18. Income from Agricultural Enterprises -
Matatiele• Incomes a ‘slow’ to increase through involvement in AEs and CIGs due to
larger economic and structural issues of market access
• Participants mainly use production for household consumption but do
contribute around 15% to their overall incomes with these activities.
Financial Services & Sustainable
Livelihoods for the Poor – Yakha Impilo
engcono ngokulondoloza imali!
0 2 4 6 8
Do not participate
in this enterprise
R0
R1001-R1500
R1501-R2000
R201-R500
R3001-R4000
Poultry
Income from Poultry production
Total
0 2 4 6
Do not participate
in this enterprise
I don't know
R0
R1-R200
R201-R500
R501-R1000
Vegetables
Income from Vegetable production
Total
0 10 20 30
Potato member I…
Potato member R0
Potato member…
Potato member…
Potato member…
Potato member…
Potato member…
Potato member R8…
Potato non…
Income from potato production
Total
19. Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono
ngokulondoloza imali!
info@saveact.org.za
Editor's Notes
There are three main components in SaveAct approach and they are seen by SaveAct as forming a stepped-approach.
The first pillar of the approach is the creation of savings and credit groups. These are seen as platform for building social capital and promote support strategies.
The second component of the approach is the financial education training which is provided to SCG members. This is meant to improve their ability to manage their finance and gain control over them.
As a third step, SaveAct promotes the development of enterprise with its more mature members. This is done in several ways, such as through training and mentorship.
The overall approach is meant to bring poor people towards more sustainable livelihoods and greater choice of financial services.
Even more important is how people can keep their enterprise running and the study found large evidence that SCGs provide access to credit to support existing enterprise.
In the study we asked all SCG members who were involved in enterprise if they had used an SCG loan to support their enterprise activities in the last 12 months. 78% in B and 59% in M used at least one loan to support their enterprises. (showing the relevance of the model for enterprise)
When asked to explain how being a member of an SCG helped them in supporting an enterprise:
Most members said that access to credit meant that they were able to buy stock and inputs when needed
They were able to invest more and increase their profits
In Bergville they said that it provided them with financial stability and access to bigger markets (Bergville)
While in Matatiele, members spoke about the knowledge shared within the group (Matatiele)
SCGs build on a culture of informal savings groups. The last theme we will cover here is building agency and social capital. When asked about the reasons for joining SCGs and the benefits of SCG membership, the sense of increased financial security came out strongly.
Members mentioned that SCG membership:
Improved their confidence in the ability to manage their own finances
Gave them more financial independence and decreased their reliance to loan sharks.
The third way in which SCG membership supports enterprise development is that it enables investment.
Members in both sites were asked about the main purposes of the loans they took out in 2011. From the list of uses we found that about 70% of the loans reported could be categorised as being used for investment purposes.
To explain, here non-investment referred to:
Buying food and groceries
Medical expenses
Expenses for social and cultural events
Or repaying debts
The investment purposes here are divided into four categories, with household investment being the largest in both areas:
This refers to buying building materials to renovate or extend a home or to build a house from scratch; it also refers to buying assets such as fridges or lounge suites.
Therefore many members are investing in meeting their household needs, and in doing so they are likely to be better and to focus on enterprise in the long run.
In the phased approach of SaveAct, it is argued that basic household stability and consumption smoothing needs to be secured before members feel ready to take a risk on enterprise. The above figures show that many members are investing in meeting their household needs; in doing so they are likely to be better able to focus on enterprise in the long run.
As asset bases expand, so aversion to risk tends to decrease, thereby increasing the likelihood of their expanding enterprise activity, including starting new enterprises
In the phased approach of SaveAct, it is argued that basic household stability and consumption smoothing needs to be secured before members feel ready to take a risk on enterprise. The above figures show that many members are investing in meeting their household needs; in doing so they are likely to be better able to focus on enterprise in the long run.
Circularity: In both sites, money from grants was most commonly used to pay back loans (45% in Bergville and 65% in Matatiele). As a regular and predictable source of income, the receipt of grants allows SCG members to plan the repayment of their loans. Earnings from enterprise were also mentioned as a source (45% in Bergville and 34% in Matatiele). This again underlines the importance of the two-way relationship between SCGs and enterprise – not only do savings and loans from the savings group support enterprise, but income from enterprise enables SCG members to pay back the loans they have taken.
The use of share outs also showed a similar pattern.
Household improvements and assets were the top priority followed by buying food or groceries and then paying for educational expenses and the buying of clothes.
We left it as last theme but it is actually a very important one. SCGs build on a culture of informal savings groups. The last theme we will cover here is building agency and social capital. When asked about the reasons for joining SCGs and the benefits of SCG membership, the sense of increased financial security came out strongly.
Members mentioned that SCG membership:
Improved their confidence in the ability to manage their own finances
Gave them more financial independence and decreased their reliance to loan sharks.
Reducing vulnerability is essential before people are willing to take a risk.
As asset bases expand, so aversion to risk tends to decrease, thereby increasing the likelihood of their expanding enterprise activity, including starting new enterprises
There was also a sense of ownership, as the money is kept in the community by the members.
Also under investment we again looked for an indication of trends over time by comparing the levels of savings of newer members with levels of older members. It appears that the longer one is a member, the more one tends to save.
There are several possible reasons for this:
SCG members may tend to save more as they become more familiar and comfortable with the savings group methodology, see the returns on their money and their trust in the model grows
Or because there is increasing involvement in enterprise over time.
Again, this study has given an indication but it would be useful to explore this further in a longitudinal study.
It also came out strongly that being together in an SCG also helps members to build mutual support and trust in each other as well as a new sense of collectivity. Several used words or phrases such as love, unity, friendship and advice in describing the benefits of SCG membership, and one referred to gaining a “spirit of working together”.
Lastly, most members also said that when they take out loans, they are the ones who decide how to use them. This is notable because most of the SCG members are women.