Events

Fueled by early success and a growing body of experience in the promotion of community-managed savings groups, an increasing number of implementing organizations and donors are working together to dramatically expand the service, particularly among the extremely poor in Africa. Most implementing organizations (IOs) are international non-profits drawn to promotion of savings groups as an alternative to formal microfinance for very poor and remote communities. These organizations are excited by the opportunity to reach the poor at a low cost ($20-$50 in mature programs), smooth household consumption, increase asset purchase and retention, improve nutrition, and build community—particularly women’s—empowerment. Savings groups are also sustainable, in the sense that groups persist and even expand long after the end of external support or subsidy. However, unlike MFIs, implementing organizations make no claim to recovering their costs. Realizing their vision for dramatic increases in scale—with growing but finite financial resources—will require greater efficiency in per member costs. Several IOs are experimenting with innovations in service delivery models and management processes to enhance efficiency without compromising quality, but the sector’s ability to assess these innovations and reward progress is currently inhibited by information deficits, particularly the incomparability of cost per client calculations across organizations, countries, and programs.