1. By Tom Sanderson Savings-led Microfinance Programmes

2. 2 Outline Do the poor really save? Why? How? A closer look Lessons for Microfinance Institutions Conclusions

3. 3 Do they save? Kenya, FinAccess June 2009. Sample 6,598

4. 4 Why do they save?

5. 5 1 Household basic needs (food, clothing, medical) 82% 2Emergency (burial, medical)70% 3Education35% 4Business19% 5Inheritance12% Data from Uganda FSD 2004

6. 6 Why do they borrow?

7. 7 1 Household basic needs (food, clothing, medical) 61% 2Emergency (burial, medical)32% 3Education19% 4Business15% 5Pay off debts9% Why do they borrow? Data from Uganda FSD 2004

8. 8 Use of Savings & Credit Products Savings Credit Kenya, FinAccess June 2009. Sample 6,598

9. 9 How? – different savings models Secret place / friends / family * Deposit Collectors * ROSCAs * ASCA / VSLA SACCO Credit Union Village Bank / FSA

10. 10 Deposit Collectors Fixed amount Regular In = Out, less fee Relies on Trust

11. 11 ROSCA Fixed amount Regular In = Out Fixed sequence

12. 12 VSLAs / ASCA

13. 13 VSLAs / ASCA Flexible amount Flexible timing In = Out, + interest Flexible sequence

14. 14 Five Talents’ Savings-led Programmes ProjectNo. MembersTotal Savings Kenya2,604$409,000 S. Sudan917$17,000 Chennai, India3,980$216,000 Burundi2,497$7,000 Trujija, Bolivia202$3,000 Total10,200$652,000

15. 15 New Developments

16. 16 Lessons for MFIs Don’t overlook savings Don’t over-emphasise business Do adapt the MF models Savings-led models can reach further Usually cheaper

17. 17 Conclusions Lump Sums Many different models Self-help (hot/cold money) Training needs and platform Group-management

18. 18 Contact: www.fivetalents.org.uk info@fivetalents.org.uk Tom Sanderson