Despite the strong evidence of benefits that members, households and communities derive through participating in Savings Groups, the system faces several constraints. First and foremost, there is simply no prospect of sufficient donor funding to meet the global demand for Savings Groups under the current model and there are few if any current models that can reliably create new groups and support existing groups absent recurring donor funding. Secondly, while most groups continue to operate independently for several years, many dissolve or do not function to the full benefit of all members, either due to poor training, lack of ongoing support, elite capture, etc. And finally, relationships between Savings Groups and external service providers often require facilitation – beyond the finite period of project cycles – to ensure that service providers understand the market and members have the capacity to make informed decisions.
In response to these constraints, there has recently been interest among several funders and development organizations in applying a market systems approach to Savings Groups. The market systems approach is based on creating a foundation for lasting change where the market system has the incentives and capability to meet future challenges and continues to meet the changing needs of disadvantaged populations. The result is sustained impact, rather than impact that is short-lived or dependent on further injections of development funding. If sustainability is not considered in the context of a market system—and the functions and players within it—change is often limited, reversible and ultimately ineffective in improving the lives of vulnerable people. Yet, as the principles of market systems development are applied to Savings Groups, continued experimentation is required, along with more evidence to determine which interventions work, why, and how. Importantly, lessons of what interventions do and do not work need to be shared so that interventions that do work can be replicated and scaled.
This track explored a market system approach to increase the scale, impact and sustainability of Savings Groups and its application in several contexts. From government to private sector to various NGO approaches, these sessions analyzed current constraints, examined the elements of a well-functioning system, shared lessons on the respective roles of development versus market actors, and proposed good practice in monitoring and measuring systemic change.
Over two billion adults worldwide do not have access to formal financial services, and Savings Groups represent a promising pathway for financial inclusion for isolated communities. With total assets of about $1 billion, they aggregate demand among many low-income individuals. Savings Groups are organized, disciplined, experienced in money management, and have identified needs that established financial service providers (FSPs) can address. Increasingly, groups want a safe place to store long-term savings and excess liquidity, especially when large sums accumulate towards the end of saving cycles, and new business models, partnerships, and alternative delivery channels are improving the feasibility of delivering formal financial services to Savings Groups.
This track explored the demand for formal financial services by Savings Groups and their members, good practices for the delivery of financial services to Savings Groups, alternative delivery channels and innovations in product design, customer engagement, consumer protection, and the impact of these strategies on Savings Groups, their members, and FSPs.
Savings Groups reach very poor and vulnerable populations more effectively than institutional microfinance programs. They require limited infrastructure, savings deposits and loan repayments are flexible, and even the most vulnerable members of the community can understand and participate in group operations. To increase the outreach and impact of Savings Groups, new strategies are being developed to reach very poor households, including improvements in targeting, messaging, training, delivery channels, group procedures and governance. Other innovations blend Savings Groups with other goods and services like conditional cash transfers and poverty graduation programs. Recent efforts to target the extreme poor and underserved populations – such as caregivers of orphans and vulnerable children, HIV-affected households, internally-displaced and refugee populations, the disabled, and youth – provide a growing body of experience from which to identify and share good practices.
This track explored the potential inclusiveness of Savings Groups, within some of the most vulnerable and underserved populations. These include working with people in marginalized environments as well as fragile and conflict-affected states.
Savings Groups contribute to women’s economic empowerment by increasing women’s access to and control over assets. Beyond financial intermediation, Savings Groups can also be gender-transformative. Harmful and discriminatory gender norms, the burden of unpaid labor, sexual violence, unequal access to inclusive education and health services, are among the many barriers and injustices that adversely affect the life trajectory of girls and young women, reinforce gender inequalities, impede inclusive growth, and perpetuate poverty across generations. Yet, in combination with other interventions, Savings Groups programs that address these social inequalities by engaging with the wider community can bring about transformative change. Savings Groups can serve as safe spaces and sensitize girls, boys, young women and men to become agents of change by challenging harmful gender norms and gender inequalities in all forms.
This track explored the potential causal pathways between Savings Groups, the empowerment of girls and young women, the roles of men and boys in women’s economic empowerment, as well as the ability of Savings Groups to incorporate personal, social and political dimensions of empowerment. Main topics include the prevention of intimate partner violence, working with female sex workers, reproductive health access, women’s political engagement, and more.