Two and a half billion people worldwide, too poor and too rural to be served by traditional financial institutions desperately need a better way to save and borrow. Even the most innovative banking institutions can’t reach them; savings groups can.
In savings groups, members put what they can in a communal pot and make loans to individual members for needs like buying food to survive the “lean season” before the harvest, building a business, investing in livestock, or paying school fees. Once a year, the entire pot plus interest on loans is divided among the members. Unlike other poverty alleviation options, savings groups are run entirely by their members, and, they spread by word of mouth from village to village, allowing them to reach remote areas with remarkable success.
Savings groups are a “catalytic innovation” that bypasses subsidies, dependency, and high costs while effectively reducing chronic hunger, building assets, and increasing solidarity. Today, saving groups have 10 million members around the globe—there are savings groups in 100,000 villages in 65 countries —with minimal support, membership could grow to ten times this number.
Ashe and Neilan show that applying savings group principles could revolutionize development in areas as diverse as health, agriculture, education and grassroots political empowerment. “Being organized gives us courage,” as one woman said. It is their courage translated into action that explains the success of "in their own hands" development.
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Sponsored by Oxfam America: This book was developed with Oxfam America—in 2005 Ashe, Oxfam, and their partner Freedom from Hunger, pioneered a program, Saving for Change, to expand savings groups worldwide.
Learn more about Ashe's ongoing savings groups project
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The Global Development and Environment Institute’s Globalization and Sustainable Development Program examines the economic, social and environmental impacts of economic integration in developing countries, with a particular emphasis on the WTO and NAFTA's lessons for trade and development policy. The goal of the program is to identify policies and international agreements that foster sustainable development.