March 3, 2014
The Pacific Financial Inclusion Programme (PFIP) in partnership with the Central Bank of Solomon Islands (CBSI) hosted a workshop on savings clubs from 24th to 27th February 2014 in Honiara, Solomon Islands. The workshop was part of an ongoing study undertaken by PFIP to understand existing savings club methodologies and to suggest sound principles and methods to make all savings clubs robust and sustainable.
The workshop also introduced oral information tools as a means of developing financial numeracy and literacy skills, targeted at rural people. Savings clubs are small financial enterprises, predominantly in the remote rural areas, providing basic financial services like savings deposits, withdrawals and loans to small groups of people living and working together in the same community or village. While they have been in existence for several years, information on savings club numbers and practices have been little documented.
The CBSI and PFIP believe it is important to understand savings clubs as a primary access point for financial services in remote rural areas, where formal financial services (like banks) are yet to reach and may take several years to do so. The workshop was inaugurated by the Governor of CBSI, Denton Rarawa. “Savings clubs play an important role in the cash economy, providing financial inclusion to the unbanked in remote villages. Also, savings clubs are a training ground for financial literacy and competency where members learn to record amounts in their passbooks, count money and check balances,” the Governor said. “Savings clubs encourage members to save, use the money for income generation, earn more money and improve their money handling skills.
As savings clubs grow, they can over time link up to the formal financial sector,” he added. The workshop was facilitated by Brett Mathews, savings club advisor and Krishnan Narasimhan, Financial Inclusion Specialist, PFIP. The workshop included a special panel discussion on “Linking Savings Club to the Formal Financial Services” with panelists from the commercial banks and a micro finance institution in Solomon Islands.
Forty participants from all the provinces of the Solomon Islands attended the workshop. Participants included savings club practitioners, leaders of savings clubs, facilitators, staff of NGOs and institutions promoting savings clubs, development partners, donors, private sector and policy makers.
The Pacific Financial Inclusion Programme (PFIP) is a joint programme of the United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP) with additional funding support from the Australian Government and the European Union/Africa, Caribbean and Pacific Microfinance Framework Programme(EU/ACP)