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Introduction to Saving for Change

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OxfamAmerica

This document discusses Saving for Change (SfC), a savings-led microfinance initiative for rural poor populations. Some key points: 1) SfC works through informal groups of 20 people who save together and can take small loans. It operates outside of regulatory frameworks and builds on existing savings traditions. 2) SfC received funding from the Gates Foundation to expand to new areas, create training manuals, conduct research, and feasibility studies in Latin America. 3) SfC aims to provide financial services to populations that previously had little to no access, such as 70-80% of communities in Cambodia. 4) The goal is for villagers to replicate the program through 1,

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Saving for ChangeA joint Initiative of Oxfam America and FreedomfromHunger
… Basic facts
SAVING FOR CHANGEFacilitator (not Provider) MicrofinanceInformal groups of 20
Under regulatory radarscope
Build on ROSCA traditions
Group Saves
Loans with interest $1 -$100
Saving +interest divided yearly
No matching funds
No link to external creditGates Grant Four ComponentsExpansion 2. Manuals/Training-Oxfam/FfHResearchLatin American feasibility studyIf successful much more funding in 2 to 3 years
Introduction to Saving for Change
Saving for Change Created a new MF Market 10% had MFI or Credit union loan
20% members of tontines (ROSCAS)
70% to 80% had no access to improved financial services
Cambodia 20% had access to MFI creditWhat makes us DifferentFrom VSLAOral record keeping
Pictographic Manual
ROSCA Associations
No link to external capital or matching funds
Focus on Replicating agent
Saturation to reach poorest
Innovations from the groups
Additional services FfH Malaria and Business education modules
Social movement
Research…the SfC Model
Different Financial Products in Different MarketsCommercial Banks2 Billion People$1,500–$20,000 or more/yr.Credit UnionsNear PoorUpper PoorMFIs$2 to $4 per day/ $730–$1,500/yr.4 Billion PeoplePoor$1 to $2 per day/ $360–$730/yr.Detitute*Sources: VISA International, World Bank, C.K. Pralahad
Different Financial Products in Different MarketsCommercial Banks2 Billion People$1,500–$20,000 or more/yr.Credit UnionsNear PoorUpper PoorMFIs$2 to $4 per day/ $730–$1,500/yr.4 Billion PeopleSavings Led Poor$1 to $2 per day/ $360–$730/yr.Less than $1 per day/ $360/yr.Destitute
SfC ModelCurrent Savings lose 20% per yearCurrent Lending CostsHomeAnimalsJewelryTontinesRemittancesMoney LendersSuppliersMFIs
SfC ModelCurrent Savings lose 20% per yearCurrent Lending CostsHomeAnimalsJewelryTontinesRemittancesMoney LendersSuppliersMFIs
Introduction to Saving for Change
Oxfam America: Saving for ChangeA Savings-led, Low Cost, Sustainable Microfinance Initiative for the Rural PoorSelf-Managed GroupsSavings and LendingBusinessesIncreased Food ConsumptionAccess to Health CareSolidarity and NetworksEmpowerment$400,000$5,000,0001 coordinator10 animatorsPotential for Country-wideImpact (10,000 groups, 200,000 villagers)1000 groups20,000 membersReplication300 villages200,000 populationOur Commitment: 10 years, 1,260,000 villagers, 63,000 groups, 8-10 countries 

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Introduction to Saving for Change