NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, March 18, 2014

Traditional village-level savings groups per se are nothing new; what is different here – and in hundreds of villages across Cambodia and tens of thousands of villages around the world – is the model: known as Saving for Change (SfC), it is being used in 13 countries.

SfC has a number of central principles that have driven its success.

First, the groups are small and self-selected, ideally between 15-25 people, because that makes it easier for the members to meet.

Second, the group operates independently. The members decide which person will maintain the ledger, who will be group president, who keeps the cashbox and who holds the key to the cashbox. The group also determines the interest rate that members pay to borrow funds – typically two percent monthly.

Third, the NGO that helps set up the savings group never injects funds; instead it trains villagers to run the savings group themselves, then monitors and advises the group over the following year