Mark Staehle, Chars Livelihoods Programme, The Role of Savings Groups in Building Assets and Financial Capability

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The Role of Savings Groups in Building Assets and Financial Capability, 18th Microcredit Summit, Abu Dhabi UAE, March 14-17, 2016

Presentations & Public Speaking

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Digital Savings Groups
The Aga Khan Foundation

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What problems are being solved?
Cash security
$100m per year
Theft isn’t a big problem yet, but…
 A robbery at distribution is worth a year’s household income
 Some groups save $10k+
(Less critically) bookkeeping isn’t easy
Donor dependence inhibits scale

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What about bank linkage?
We looked at it, but…
The business case for bank linkage isn’t yet clear
 Do telcos want lumpy payins?
 Do agents want to support cash distributions?
We are already looking at mobile money
 Reduce household financial services expense
 Host services (SaaS) for cashless enterprises

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How will it work
(from April…)?

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How will it work…?
Pay to/from group from m-wallet of choice
Pay in and request loans between meetings
Meet fortnightly to review statements and approve loans
Platform will inform, but not decide
All decisions will require randomized approvals
Approval window times out quickly
Keeping it a group…

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Likely challenges – the big ones
Why meet?
Platform is almost too capable…
Why limit the group size?
Why limit the variation in savings?
Why not use an algorithm to suggest big internal loans?
Why distribute each year?
De-centralization has always been our biggest virtue
Privacy?

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Commercial prospects
We hope user fees and float margin will sustain platform offering to
experienced DSGs
Could we raise other revenue for expansion without donor funds?
Customer acquisition for DFS of value to telcos (in exclusive mode)
Facilitate value added services
 Limited group overdraft
 Individual loans in parallel
 Insurance
 Non financial services?

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Likely challenges – the not so big ones
SMS and USSD are clunky
Low literacy and tech savvy
Payouts subject to encashment fees (weak digital ecosystem)

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Paperless Training and Tracking
(Mozambique)

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Animated training

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Mobile data platform
Animations embedded in an Android app
Master trainers will train from a tablet
Trainers will get the animations in a
smartphone app
Smartphone app will be used to post
new groups to a new data platform
Groups will update their membership
details

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