Long distances between rural villages and banking institutions is one of several obstacles to affording those living in poverty a safe place to deposit their savings. Many formal institutions refuse micro deposits, as they simply don’t meet basic minimums established by the bank itself. This leaves women living in impoverished communities with few safe options to save.
This is where micro-savings initiatives can make a difference. Members share a common desire to uplift their families and create a more secure future. In the most basic model, members pledge a small amount each week into a shared fund. Among other things, members must demonstrate good character and be respected within the community itself before being allowed to join a cooperative. Officers are then elected and all members are trained in record keeping, to ensure greater accountability amongst the group. The groups meet each week. Members are encouraged to make deposits regardless of the amount. The process of recording the deposits is done in plain sight, affording the highest level of transparency amongst members. At the end of each meeting, funds are deposited into an interest-bearing account at a nearby credit union. Some groups limit the transactions to savings alone, while others allow approved loans for hardships, or known micro-enterprise endeavors. Regardless of the reason, no member is allowed to take more than 50% of what they have already saved.
FPA provides the needed training, materials and monitoring to ensure the best possible outcome! Groups have reached year-end balances of over 10,000,000 UGX (nearing $3,000.00 USD).
This is a triumph by any measure!