Savings Groups

savings club_4The concept of savings groups (SGs) is an emerging movement, where members of savings groups save together, lend their savings to each other with interest, and share the profits. Like tiny local credit unions, savings group projects have evolved specific technologies in which members provide their own savings and credit ser­vices at negligible cost, while retaining earnings and capital in their own communities. They are simple, transparent, and independent. In some places, savings groups complement the existing services of regulated formal financial institutions. In others, they reach people who have been completely excluded from access to any financial service, formal or informal.

Payouts are often scheduled to coincide with planned yearly expenses such as seasonal planting, payment of school fees, or important festivals, giving SG members access to funds when they are most needed. In addition, many SGs elect to allocate a portion of their money to a “social fund,” which acts as an insurance policy in times of emergency.


Solomon Islands

Over the past two years, PFIP has been conducting research, developing and implementing a local framework for SGs in the Solomon Islands. For those involved with SGs, the study found improvements in average savings balances year-on-year, with 80-85% of members re-joining after each cycle, a practical demonstration of the value they see in the groups.

Following the study, PFIP recognized that there was significant room for improvement amongst existing SGs to increase effectiveness, and as a result developed an SG Practice Guide for the Solomon Islands, compiling best practices for implementing SGs. PFIP partnered with the Central Bank to run workshops for SG facilitators on implementing best practices, including church groups, women based institutions and non-government organizations such as Oxfam and Save the Children.

In order to deepen access to basic savings for marginalized groups, PFIP is currently partnering with World Vision International to expand SGs into a rural province.