Oxfam America's innovative microfinance program, Saving for Change, recently reached a membership milestone: Since the program's launch in April 2005, more than 100,000 poor women and men in Mali, Senegal, Burkina Faso, and Cambodia have joined savings and lending groups.
Saving for Change is based on the idea that poor people—many of whom live in rural areas without access to financial services—need a safe place to save money and access to small loans. Villagers come together to form groups of about 20 people that work like community banks; the members save money, make loans, and pay each other interest that grows the group fund. So far, groups in four countries have collectively saved nearly $1.3 million.
Small loans from the groups can make a big difference in people's lives. Members use their loans to start or grow small businesses, purchase seeds, buy medical supplies for sick family members, or pay school fees for their children.
The savings groups also provide a venue for health and agricultural education. In Mali, group members learn how to treat and prevent malaria, a disease that is endemic in this West African country. In Cambodia, participants learn about the System of Rice Intensification (SRI), a new way of growing rice that increases productivity while decreasing the use of pesticides and harmful chemicals.
Most of the 100,000 members are women, who find special benefits from participation. With the ability to lead groups and manage their own finances, they often see a corresponding increase in their status in the community and in the household.
The process of forming new groups begins in the villages, where local agents and leaders train savings groups in their own communities and then travel to nearby villages to teach others how to start saving. This self-replicating approach keeps costs down and makes it easy for new groups to form—leading to the rapid growth of the program.
"This membership milestone demonstrates the potential of Saving for Change as a model that can truly reach large numbers of poor people," says Vinod Parmeshwar, Community Finance Specialist at Oxfam America. "We hope to build Saving for Change membership to one million villagers over the next five years."