Savings Groups

Savings groups depend heavily on literate leaders. This is unnecessary, and limits outreach

Savings Groups Build Financial Skills
Savings groups are often seen simply as a way to deliver financial services to remote communities. At My Oral Village we believe they are much more than that: they are the most effective solution yet developed for imparting basic financial skills. At their best they are a safe ‘personal laboratory’, where people adapting to the cash economy and the modern financial system can test their knowledge of cash and personal finance, learn more about it, and gradually build their competencies.

At My Oral Village, we are pinpointing critical oral skill gaps, and looking for ways to link those gaps to the savings group learning engine. This research involves two components.

Sustainable Groups Where There is No Literacy
My Oral Village is conduct research to develop savings groups that can function sustainably in villages where no one can read or write, and can build tailored savings groups systems that optimize financial service scope and quality based on the local level of human capacity.

Modern savings groups are often not effective in communities where illiteracy rates are very high, including large swathes of Africa, Asia and the Pacific. The less literate the village, the more these savings groups must depend on men to function.

A VSLA committee at work in Rwanda. VSLAs transmit modern values from the comfort of a traditional context.

A VSLA committee at work in Rwanda. VSLAs transmit modern values from the comfort of a traditional context.

Text expands the scope of financial services a savings group can deliver, but where literacy is low, the deterioration in group stability and governance quality resulting non-transparency more than offsets this effect.

Building The Skills of Savings Group Members
Illiterate savings group members often do not have the basic skills required to plan in cash (using large numbers) for the future (more than a few months). OIM tools can support the acquisition of some of these skills through repetitive transacting by members. Once learned these skills can boost household planning as well.

This is a complex transition that involves not just substantial acquisition of hard skills, but substantial behavioral change as well. Research is expected to continue to fuel innovation for years to come.