Reaching Rural Kenya with Group Savings and Loan Associations
CARE’s Community Savings and Loans Project (COSALO), is simultaneously testing two innovations. CARE hopes that both innovations will permit greater outreach at lower cost, through empowering local entrepreneurs and faith based organisations to do work that previously was done by CARE or other implementors.
The first innovation being tested is that all the Community Based Trainers - CBTs - who do the actual work of group formation are being paid exclusively on a commission basis. They receive approximately two dollars per group member in all the groups they form, with two-thirds paid when the group starts saving, and one-third coming when the group distributes its assets at the end of the year to ensure that CBTs monitor the groups’ quality over the year. The CBTs are not CARE employees, but independent contractors working purely on a commission basis.
The second innovation is that CARE is transferring some of its management responsibilities to two groups of local partners: faith-based organisations (FBOs) and local entrepreneurs, (franchisees). The franchisees operate under a memorandum of understanding with CARE, and are recompensed for their work at about $3/per member.
As part of the test, CARE is also directly managing a small group of CBTs; although they are managed by CARE, they also are paid on a commission basis.