Savings and Loans Programme
Aims
To help community members improve their livelihoods even further, we have designed two complimentary schemes which provide community members with much needed capital and encourage savings:
- The Community Savings Scheme
- The Loans Scheme
The Community Savings Scheme encourages savings through regular monthly contributions. We provide the group with training and mentoring to run the group and they then set their own by-laws, including deciding on how much the monthly contributions should be. As the groups savings grow they are able to offer small loans to members at an interest rate they set themselves.
Alongside the Savings Scheme LTT offer small seed-funding loans, enabling individuals to invest in their income generation activities and increase their incomes.
As the groups savings pot grows the loans from LTT reduce until the full value of our loan is replaced by group members own savings.
Progress
Our work on Savings and Loans with the community has continually evolved - a result of our effective MEL (Monitoring, Evaluation and Learning) processes.
In 2017 we revised the savings scheme in response to feedback from the groups we've been working with. Under the new savings scheme group members make regular monthly contributions at a rate agreed by the group. These small contributions add up over the year creating a pot from which members can access small loans. After 12 months each member has savings which can be reissued to them or they can choose to continue into a 2nd cycle of the community managed savings scheme. The interest from any loans is added to the groups pot and can be shared out in proportion to a members savings.
This approach better meets the needs of those we work with and together we will be monitoring things closely so that we can make further modifications going forwards.
Impacts
By introducing this savings and loans model to the communities we work with, we have witnessed some very promising impacts.
Group members now have access to capital enabling them to invest in their businesses, beit farming, retail, catering, or or other ideas.
As a result of this investment, those businesses are now making healthier profits which have been used to cover a range of costs - including home improvements, sending children to secondary school, having a better diet or meeting other household priorities.