She got up from her mat and walked across the group to sit next to me. She couldn’t wait to share with me (via a translator), “before this Savings Group we could never realise savings … We would (waste) it and just buy things… Now the situation has changed…. When we have money, we collect. Before the savings group, women couldn’t freely speak in front of others but now our capacity has been built and we can freely speak up in groups.” Her name is Shrijan Rokaya, a beautiful young mother bursting with excitement about being a member of the new Mastadev Women Savings Group that was formed only four months ago in Jumla Area Development Program, Nepal.
This was my first visit to Jumla, one of the most beautiful Area Development Programs I’ve ever visited – isolated amongst the Himalayan mountains – so beautiful that everywhere I turned I wanted to capture what I saw on camera, including the people. I had met savings groups before (mostly in African countries), but this groups’ enthusiasm and passion was contagious. This time it was their ‘hope’ in their own future and their increased confidence and self-esteem because of this group that struck me. In only four months, it was amazing what an effect a unified, empowered group can have on individuals.
Each month, every member saves at least 300 rupees (~US$2.90) – the cost of ‘one share’. Already, their collective savings total approximately 41,000 rupees (~US$400) in the “Loan Fund” (blue bag), and 4,100 (~US$40) in the “Social Fund” (red bag). A social fund is a form of insurance for the group and provides grants for emergency assistance, educational costs or funeral expenses. The social fund may be used for group members or members may vote to use it on a project that benefits the entire community like supporting families with HIV/AIDs. Members have their own passbooks to record the number of ‘shares’ they buy, as World Vision partners have taught them financial literacy, calculating and public speaking skills. All money is kept in a locked box with three separate keys. Members are then able to able to take micro-loans from these savings (rather than borrowing out of debt) and pay an agreed monthly interest rate (e.g. 2%), which is much lower than the rate that the local bank or moneylender charges. Some groups even enforce their own bylaw by charging any member who is late or misses a meeting a minimal fee.
For some of us, it might be hard to understand why ‘saving’ and providing for their families is so hard for women in Nepal. But for many poor women in isolated communities like Jumla, saving is either a foreign concept or there was never a safe way to do it. Many are subsistence farmers, surviving on enough just to get through each day with a limited concept of saving for ‘tomorrow’. Often, these women lack any control or decision making power over how money is spent. They were dependent on their husbands, and always had to ask their husbands for money (who often are away for months working in India to earn an income). Now, its easy for them – they can invest savings in their children’s education; purchase necessities (e.g. for hygiene and sanitation); and begin or expand small income generating activities (like vegetable farming). Moreover, their monthly meetings are not just about collecting money. They support each other through their personal struggles, share local social issues and discuss challenges and opportunities. Together they decide who should be a priority to take a loan for their proposed ideas.
Savings Groups empower poor (often isolated) families to save their own money (not instalments of external capital) in small regular amounts and in a safe manner. They then are able to borrow small loans (equal to three times their savings) without the extra pressure of ‘loan sharks’. This instils hope by enabling community members to plan ahead, cover expenses for their children like school fees or medical costs without selling their assets and cope with household emergencies. Many also use these loans to invest in income generating activities improve their livelihoods and income. Savings groups allow poor families, especially women, to have a voice and decision making power to lift themselves out of poverty – with their own funds without increasing their vulnerability to loan ‘sharks’.
A member of another newly-formed group, the Bhagwoti Women Savings Group, expressed they are “excited … now we can solve immediate problems such as an emergency for a child, and can easily get money here for daily needs … [I’ve been in] different groups in the past but this is more effective … Other ways to save, such as at the bank, are difficult as you need to sign cheques; it’s difficult to get out money; banks are far away and often closed; and the distance is difficult – especially in emergencies”.
My experiences in community development over the past 10 years has shown me that the Savings and Loans Group approach is one of the most empowering and sustainable models that exist to target the most vulnerable people, and to equip them with the necessary skills and confidence (not handouts) to lift themselves out of poverty. Savings groups not only empower and create ownership, accountability, and discipline: they also instil a sense of “hope”. Hope in the future is a necessary (often forgotten) quality that is essential for sustainable development, which is not just about targeting a lack of material things. It requires a transformation of the heart and a motivation to take action themselves to reach their full potential. In this way, savings groups can address the root causes and barriers such as vulnerability, powerlessness and lack of self confidence in an empowering (rather than condescending or paternalistic) manner.
It was at this moment, when celebrating these women’s accomplishments, that I could really see how their sense of freedom and independence is unlocking their paralysis of poverty. I could see their ‘drive’ and passion to take initiative and seek opportunities to improve their situation. They are now able to make meaningful independent choices and plan for the future with confidence. As an example, Bhagwoti Women Savings Group expressed their dreams and plans of wanting to construct a meeting hall; to collectively make trails in the forest to collect forest products; to volunteer in the local schools; and to visit homes of parents to spread awareness about social issues such as early child marriage. They already have plans to make use of the ‘low grade’ apples (those they couldn’t sell at the market) to start a small jam making industry.
The groups I visited, even after only four months, were saying even their neighbours saw the difference the Savings Group was making and they too want to be part of it. One member expressed: “Now we can save for the future … and without World Vision … It’s no problem”. They now have the confidence and skills to carry on independently. I left these groups reflecting on the wisdom of the well-known Chinese philosopher and poet Lao Tzu, “Go to the people. Live with them. Learn from them. Love them. Start with what they know. Build with what they have. But with the best leaders, when the work is done, the task accomplished, the people will say, ‘we have done this ourselves’.”