Oxfam America’s Saving for Change program is reporting a significant milestone: the program is now reaching more than 500,000 members in 24,000 groups in five countries. Mali, where the program started in 2005, continues to have the most members: As of mid-July 2011 there are more than 385,000 women in nearly 17,000 savings and lending groups in more than 4,000 villages in Mali.
The innovative Saving for Change program is based on the mobilization of savings in small (20 to 25 members) groups. This approach differs from credit-based microfinance in that group members put their own money—sometimes as little as 25 cents a week—into a savings pool which is then loaned out to group members to cover emergency expenses or to start a small business. Saving for Change is now helping half a million people (primarily women, and a few men in Cambodia) with a safe and convenient place to save money, and as a source of small loans.
“This is a population that has been scarcely touched by microfinance institutions and banks,” says Jeff Ashe, the director of Oxfam America’s Community Finance program. Ashe helped introduce the Saving for Change model to Oxfam America in 2005 after carrying out an evaluation of similar programs in Nepal, India, and Zimbabwe.
With support from a grant from the Bill & Melinda Gates Foundation, Oxfam is studying participation in Saving for Change and how this program is helping people provide some financial stability and improve their lives. Early results from studies in Mali are showing that participation in a Saving for Change group provides a valuable buffer against shock – if a household member gets sick, money is available to cover medical costs that might otherwise tip a very poor family into destitution.
“Knowing that their family can fall back on a loan from Saving for Change to deal with an emergency helps reduce stress,” says Janina Matuszeski, research coordinator for Oxfam America’s Community Finance Program. She says that this financial confidence “helps a woman get her head up and say, ‘what’s next?’ and take some control over her financial future.”
Saving for Change is currently operating in Mali, Senegal, El Salvador, Guatemala, and Cambodia. In total, the members in these groups are currently saving more than $9 million. The money these groups save (plus the interest on loans) is distributed to the group members every year when they need it the most, usually just before the harvest when families need food and have back-to-school expenses.
“Saving for Change groups are now starting to be used as platforms to introduce ecological agriculture and business and leadership training,” Ashe says. “We also want to build on initiatives that the women have taken on themselves such as the formation of girls groups and the purchase of grain to tide the members over the ‘hungry season.’”
Saving for Change is continuing to attract members, form new groups, and study the effects of the program on group members. “The objective is to develop a mass-scale and replicable model for building village economies at a modest cost per villager,” says Ashe. “We’ll study the outcomes, and then disseminate this model broadly.”