Reaching Informal Savings Groups with Formal Financial Products

[mouakter13]

Formalizing the financial activities of savings groups and other informal savings mechanisms (ISMs) has long been a priority in the financial inclusion world. Savings at the Frontier (SatF) began with precisely this goal in mind. A six-and-a-half-year programme (2015-2022), SatF seeks to bridge the gap between the supply of formal financial services and ISMs, so that ISM users have greater choice and can access the financial services that best meet their needs.

As the programme nears completion, SatF is supporting the efforts of 10 financial service providers (FSPs) in Ghana, Tanzania and Zambia to test and deepen their commercial relationships with ISMs. Previously, in 2019-2020, we carried out the first round of an evaluation using the Qualitative Impact Assessment Protocol (QuIP) in these three SatF-supported countries. Through qualitative interviews and focus discussions, the evaluation tested SatF’s theory of change, which assumed that ISM users (i.e., savings group members) would be linked to FSPs through the creation of group accounts at these financial institutions to hold group savings.

SatF had assumed that when FSPs formalized these group france whatsapp number datasavings, it would lead ISM users to open individual accounts with these providers, to facilitate digital group-to-member (G2M) and member-to-group (M2G) transactions. By digitizing these transactions, we expected that savings groups and their members would be able to lower transaction costs (e.g., by reducing the time needed to collect and disburse payments to and from the group) while also storing their money securely and earning interest on the balance.

But the results of this evaluation challenged these assumptions – and SatF’s theory of change. I’ll explore these findings, and their implications for efforts to digitize savings groups, in the article below.