Introduction to Saving for Change

Saving for ChangeA joint Initiative of Oxfam America and

Freedom from Hunger

… Basic facts

SAVING FOR CHANGEFacilitator (not Provider)

Microfinance

• Informal groups of 20• Under regulatory radarscope• Build on ROSCA traditions• Group Saves• Loans with interest $1 -$100• Saving +interest divided yearly • No matching funds• No link to external credit

Gates Grant Four Components

1. Expansion

2. Manuals/Training-Oxfam/FfH

3. Research

4. Latin American feasibility study

If successful much more

funding in 2 to 3 years

Saving for Change Created a new MF Market

• 10% had MFI or Credit union loan

• 20% members of tontines (ROSCAS)

• 70% to 80% had no access to improved financial services

• Cambodia 20% had access to MFI credit

What makes us DifferentFrom VSLA

• Oral record keeping• Pictographic Manual • ROSCA Associations • No link to external capital or

matching funds• Focus on Replicating agent• Saturation to reach poorest• Innovations from the groups• Additional services FfH Malaria

and Business education modules

• Social movement • Research

…the SfC Model

Different Financial Products in Different Markets

*Sources: VISA International, World Bank, C.K. Pralahad

Detitute

$1 to $2 per day/ $360–$730/yr. Poor

4 Billion People

$2 to $4 per day/ $730–$1,500/yr.

2 Billion People

Upper PoorNear P

oor

$1,500–$20,000 or more/yr.

Commercial Banks

Credit Unions

MFIs

Less than $1 per day/ $360/yr. Destitute

$1 to $2 per day/ $360–$730/yr. Poor

4 Billion People

$2 to $4 per day/ $730–$1,500/yr.

2 Billion People

Upper PoorNear P

oor

$1,500–$20,000 or more/yr.

Commercial Banks

Credit Unions

MFIs

Savings Led

Different Financial Products in Different Markets

SfC ModelCurrent Savings

lose 20% per year

HomeAnimalsJewelryTontines

Remittances

Money LendersSuppliers

MFIs

Current Lending Costs

Current Savings lose 20% per year

HomeAnimalsJewelryTontines

Remittances

Money LendersSuppliers

MFIs

Current Lending Costs

More savings

20%-40%

More Income

Income Generating Activities

Social Capital

SfC Model

$400,000

1000 groups20,000 members

300 villages200,000 population

1 coordinator10 animators

Potential for Country-wide

Impact (10,000 groups, 200,000 villagers)

Self-Managed GroupsSavings and Lending

BusinessesIncreased Food Consumption

Access to Health CareSolidarity and Networks

Empowerment

OUR COMMITMENT: 10 YEARS, 1,260,000 VILLAGERS, 63,000 GROUPS, 8-10 COUNTRIES

Oxfam America: Saving for Change A Savings-led, Low Cost, Sustainable Microfinance Initiative for

the Rural Poor

REPLICATION

$5,000,000

Theory of Change

power

Group Assets $

Change

Household

Village

…Benefits of the SfC Model

Starting Amount Year 1 Year 2 Year 3 Year 4 Year 50

10

20

30

40

50

60

70

80

Impact of Saving for Change 30% Return on $20 over Five Years Versus 20% Loss in Traditional Savings

30% Return per Year 0% Return per Year 20% Loss per Year

Do

llar

s at

En

d o

f Y

ear

Member Satisfaction with SfC

0% 20% 40% 60% 80% 100%

Loan sizes are adequate

I understand the records

I can get a loan when needed

Loans are shared fairly

Group functions harmoniously

I know how much I have saved

Secure place to save

It is worth my time

Mali Cambodia

What Members value most

Solidarity and Mutual

Assistance39%

Savings and Loans27%

Malaria education

18%

Increased Income

5%Others11%

…Program Scale-up and Replication

SfC Strategy for Scale Up

Build on World Class Experience

Leverage Local TraditionsMass-scale, Low-costBuild in Sustainability

Villagers train VillagersAdapt to Levels of Literacy

Chose an Expansion StrategyBuild on OA Strengths

One Product-Keep FocusedDelivery through Local NGOs

Simple Metrics to Assess Performance

Constant ImprovementDocument Outcomes and

ImpactFundraiseAdvocate

DESIGN DELIVERY

Replication Process

Number of Groups Formed

Time

Program Start Year 4 Year 6 Year 100

200000

400000

600000

800000

1000000

1200000

1400000

4,000 mbrs./mo. 10,000 mbrs./mo. 15,000 mbrs./mmo.

168,000

550,000

1,260,000

Growth In Membership

Areas of Operation and Expansion in Mali

Areas of operation of CEDAC (green) and RACHA (red)

Expansion Plans

Build existing programs:• Senegal• El SalvadorStart New Programs:• Laos• Vietnam• Guatemala• PeruOthers:• China (Yunnan)• Ethiopia• Bolivia• Nicaragua

Thank you