Principle 5

Implementation

If choosing to combine a Savings Group with other activities, plan carefully and respect the autonomy of the group.


SGs are rarely seen as stand-alone initiatives. In a majority of cases, the groups are used as platforms for the introduction of products and services by facilitating agencies or external agents. In other cases, SGs might be retrofitted into existing programs, such as agriculture or HIV/AIDs initiatives as a way to provide financial and social safety nets. Facilitating agencies bear the responsibility to clearly communicate expectations and make information available to help members decide whether or not they want to engage in the additional activity, or, if being retrofitted into another initiative, in the SG itself. In either case, it is important to consider the objective and value-add of the proposition, develop a clear theory of change, and carefully assess the impact on members.

Elements of Principle 5

Guidance Notes

Transparent communication of expectations

If using SGs as platforms for additional services, trainings, or products, be clear about the intention to introduce these add-ons and any responsibilities they carry. If SGs are being added to existing programming, inform prospective members of the expectations of participating in an SG, the time commitment, and related duties.

Respect for the procedures and structure of the SG

Retrofitting SGs into existing programming must be done in a way that respects the core values of SGs and the procedures set forth by the various tested methodologies. Ensure that existing program structures, such cooperatives or farmers groups are not inherited by the SG; stress the need for the SG to openly select its membership and to set up its own leadership structure.

Demand-driven quality products and services

Other activities, whether educational, entrepreneurial, or service oriented, need to respond to member demand, be worthy of members’ time, and have a clear benefit for the group. In fact, they should be introduced with as much care devoted to design, training, and management as the core activities of the SG itself. When promoting additional activities, consider the following: Who will manage the activity? What expertise is required? How much additional time will it demand from SG members? What is the cost of the additional activity, and who will pay for it? Is there a demonstrated demand for the activity? What happens post-project? What is the risk if the activity fails?

Safety of additional services and activities

Ideally, introduce other activities once the group is well established and has built the needed confidence, trust, and solidarity to adequately manage that activity. Discourage investment of group funds in activities that yield benefits to only a few members. SGs eager to start a business should be guided toward options that retain their value and require limited management, time, and labor. These activities may include purchasing animals, stocking grain, or buying chairs to rent for large gatherings. Keep in mind that these investments, despite their safety and relative ease of management, may also lead to issues when members decide to leave the group. Before a group makes such an investment, urge its members to decide what will happen at the end of the cycle, and what part of the investment will accrue to those members who choose to leave.

Caution with the allocation of group funds for any purpose outside of savings and lending

Some new models of group formation rely on trainers to provide multiple services, such as literacy and health training. In the same way, external agents may be drawn to a group’s resources and offer the group new technologies or inputs. Help trainers and external agents to understand that while members may decide to participate in the new activity, the decision to allocate group funds toward it must remain with the group. Stress this point with members, too. Similarly, help them to understand that opening their box to receive external funds can be risky, as such donations often come with strings attached and may alter group dynamics.

Caution with anyone who views the SG principally as a market for products and services

Facilitating agencies and other agents that both train SGs and view the group as a market for other activities, services, or products are unlikely to be objective about the group. Beware of incentive structures that reward group uptake of such opportunities, as they tend to shift the role of the trainer from honest broker to salesperson.

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Principle 4: Promote a tested Savings Group model and instill in members an understanding and respect for that model’s procedures.

Principle 6: If choosing to promote a relationship with a financial service provider, empower SG members to make good choices based on their interests and demands.

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