By the Bureau of Applied Research in Anthropology at the University of Arizona and Innovations for Poverty Action, published by Oxfam America and Freedom from Hunger, April 2013, 216 pages, available at: https://www.freedomfromhunger.org/sites/default/files/SavingforChangeMaliResearchFullReportMay2013.pdf
This study was funded by Freedom from Hunger, a US-based non-governmental organization that works to alleviate hunger in 19 countries, and Oxfam America, a member of Oxfam International that seeks to reduce poverty worldwide. The study evaluated the impacts of Saving for Change (SfC), a savings-group (SG) program that was co-created in 2005 by Freedom from Hunger, Oxfam America and the Stromme Foundation, a Norway-based international development organization. SGs are community-based savings programs that allow members to deposit small amounts of money on a pre-determined payment schedule and to use the accumulated funds to loan within the group. SGs are self-managed and self-funded, so they do not require start-up capital or incur the transaction costs associated with financial institutions. At the end of a savings cycle (often one year), members receive their initial contribution, plus their share of the profits yielded from interest charged on loans. According to CGAP (Consultative Group to Assist the Poor) there were 5.5 million SG members worldwide as of 2011. As of 2012, SfC reported operating in 13 countries and comprised 680,000 members.
This study examines the efforts of SfC to enhance financial inclusion in Mali, particularly among rural women, between 2009 and 2012. The data for this study was collected using a mixed methodological approach. Economists from the US-based nonprofit Innovations for Poverty Action (IPA) took a quantitative approach, conducting a randomized controlled trial (RCT) in 500 villages. Surveys measuring socioeconomic status were administered in 2009, prior to SfC being introduced, and again in 2012 after the program had been implemented in selected villages comprising 6,000 households. The qualitative side of this research was undertaken by the US-based Bureau of Applied Research in Anthropology (BARA) at the University of Arizona, which conducted an anthropological study using tools such as interviews and focus groups. BARA conducted its investigations in 19 villages that were intentionally chosen to reflect diversity in ethnicity, location, accessibility, livelihood activities and the involvement of Malian NGOs in SfC. The villages in this part of the study were, on average, 23 kilometers from the nearest paved road. Seventy percent had a primary school; while 20 percent had a health center. The average size of the study villages was 1,000 inhabitants. The majority of households in SfC villages fall below the poverty line of USD 1.25 earned per day per person.
The study found that women in SfC villages saved 31 percent more and took out twice as many loans than women in non-participating villages (known as control villages). From an anthropological perspective, this finding is significant because it can be considered shameful to borrow money from friends and family in Malian culture. Therefore SfC apparently serves as an alternative to this disfavored practice.
According to BARA data, women who initially join SfC tend to be more socially connected, more financially active and older than women who do not join. However, women who joined SfC six months after the program was implemented in their village were characterized as less socially engaged than those who became members initially. More women joined a savings group in villages where formalized training took place (40 percent compared to 32 percent). BARA’s data indicates that village agents without formal training were perceived, particularly by risk-adverse women, to be less knowledgeable. Households in formally trained villages held an average of USD 61 more in livestock at the end of the study period and had a 45 percent chance of being food insecure compared with 50 percent in informally trained villages. As a volunteer agent can be trained for USD 40, the authors suggest that structured training be formally integrated into SfC.
Statistical and anthropological findings indicate that SfC promotes resilience. A household’s livestock holdings were found to be worth an average of USD 120 more in SfC villages than in control villages. Notably, in Malian culture, livestock is considered a form of risk mitigation, or the equivalent of a financial safety net, as it can be sold in times of need. Therefore, an increase in these holdings represents more security for families and a greater ability to withstand financial shock.
The data indicate that women’s involvement in SfC is generally well-received by men. This may be because increased savings and access to capital on the part of females in households can lessen the financial burden on men. With regards to female empowerment, BARA found that SfC resulted in a perceived increase in solidarity and expanded social networks amongst women. The authors argue that this perception eventually may evolve into positive changes in socioeconomic behavior such as through increased influence in decision-making at the household level. Even though measurable data indicate minimal to moderate results in the participating villages, the study concluded that SfC is beneficial because it targets those at the very edge of Malian society, women with limited-to-no literacy skills who live in remote areas where accessibility to even basic financial services is extremely restricted.
By Lena Phillips, Research Associate
About Oxfam America
Oxfam America is the US-based member of Oxfam International, a confederation of 17 organizations working in 94 countries to reduce poverty by addressing issues such as community finance, private sector engagement, food security and rural resilience. As of 2011, Oxfam America reported total revenue of USD 116 million.
About Freedom from Hunger
Freedom from Hunger is based in the US city of Davis, California. Formerly called “Meals for Millions,” it is an NGO that operates in 19 countries with the aim of alleviating hunger and poverty. Its microfinance programs service approximately 2 million families through 26 partner microfinance institutions. At the end of 2011, Freedom from Hunger was working with a total of 150 partners reaching approximately 3.9 million women plus their families. As of the same year, the organization reported an income of USD 6.5 million.
About Innovations for Poverty Action
Innovations for Poverty Action (IPA) is a US-based nonprofit organization that uses randomized evaluations to research the impacts of development programs in microfinance, health, agriculture, education, charitable giving and community development. IPA also provides technical assistance to governments and non-government actors. Founded in 2002 as part of the US-based Financial Access Initiative (FAI), IPA is now an independent entity. As of 2012, IPA had approximately 300 projects completed or underway in 38 countries. As of 2011, the organization reported an income of USD 29.7 million.
About The Bill and Melinda Gates Foundation
Launched in 1994, the Bill and Melinda Gates Foundation is a US-based organization that provides grants to organizations in approximately 100 countries with the aim of enhancing health care, reducing poverty and expanding access to education and information technology. The foundation’s “Financial Services for the Poor” initiative focuses on providing people with secure places to save money. As of 2011, the foundation reported an endowment of USD 36.2 billion.
About CGAP (Consultative Group to Assist the Poor)
CGAP (Consultative Group to Assist the Poor) is a US-based nonprofit policy and research center dedicated to increasing financial access to poor people worldwide. CGAP is supported by approximately 40 development agencies and private foundations. Its mission is to provide market intelligence, to promote standards and to offer advisory services to governments, microfinance providers, donors and investors. CGAP reported a budget of USD 22.5 million for the fiscal year ending June 2012. CGAP is co-located with the offices of the World Bank Group in Washington DC.
Sources and Additional Resources:
“Final Impact Evaluation for the ‘Saving for Change’ Program in Mali, 2009-2012,” submitted by the Bureau of Applied Research in Anthropology at the University of Arizona and Innovations for Poverty Action, commissioned by Oxfam America and Freedom from Hunger, funded by the Bill and Melinda Gates Foundation, http://www.ilo.org/public/english/employment/mifacility/download/mpaper20_buy.pdf
“Saving for Change: Financial inclusion and resilience for the world’s poorest people,” Report Summary, May 2013, https://www.freedomfromhunger.org/sites/default/files/SavingforChangMaliResearchSummaryMay2013_0.pdf
CGAP (Consultative Group to Assist the Poor) Blog, “Savings Groups,” http://www.cgap.org/blog/savings-groups
MicroCapital.org Article, 7 April 2013: “MICROCAPITAL BRIEF: NGOs, Government Unite in Effort to Increase Savings Group Membership to 50m Worldwide by 2020,” https://www.microcapital.org/microcapital-brief-ngos-government-unite-in-effort-to-increase-savings-group-membership-to-50m-worldwide-by-2020/
MicroCapital.org Article, 23 February 2013: “MICROCAPITAL PAPER WRAP-UP: ‘Microinsurance Product Development for Microinsurance Providers’ published ”; published April 11th, 2012; https://www.microcapital.org/microfinance-paper-wrap-up-microinsurance-product-development-for-microinsurance-providers-by-michael-j-mccord-published-by-microfinance-centre-microinsurance-centre-internatio/
MicroCapital.org Article, 23 February 2013: “MICROCAPITAL PAPER WRAP-UP: The Debate on Outreach & Impact: What Do We Know and How Do We Know It”; published June 2011; https://www.microcapital.org/microfinance-paper-wrap-up-the-debate-on-outreach-impact-what-do-we-know-and-how-do-we-know-it-by-david-s-gibbons-published-by-global-microcredit-summit/
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/
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