Savings groups are a robust, simple, catalytic innovation where small groups are trained to manage their own mini-financial institutions. Members save what they can in a communal pot and loan their growing fund to each other for their short-term needs. Annually, timed for when money is scarcest, they divide the pot according to how much each saved plus their share of the interest on loans.
With more money in hand, they buy food during the ‘lean season’ before the harvest to put food on the table, pay school fees, purchase medicine, stock a business, or buy a goat or two to fatten and sell. Through disciplined savings and the support of a group, they also gain independence, skills and aspirations.