Savings and Loans Programme
To help community members grow their income even further, we have designed two simultaneous schemes:
- The Savings Scheme
- The Donor Loans Scheme
The Savings Scheme is designed to encourage members to save and make money. Any savings that the group makes during this time can then be loaned out on a short-term basis to other members, at an interest rate approved by the group in advance.
The Donor Loans Scheme runs alongside the Savings Scheme, providing seed-funding to support individuals to increase their income generation potential. The loan they receive is then reduced year on year, at the rate at which the saving pot grows.
All loans are made to the group - not to individuals. It is also the group's responsibility to repay the loan on time.
Our Savings and Loans programme has continually evolved and adapted to suit the current environment - a result of our effective MEL (Monitoring, Evaluation and Learning) processes.
Initially, we found that the repayments of the loans were being met as required. However, the community were struggling with the voluntary annual savings contributions. Therefore, after consultation, we have modified them to become compulsory monthly contributions with a minimum contribution.
This approach will be kickstarted in September 2017, and is set to suit the needs of the community far better.
By introducing this unique loans model in the communities we work with, we have witnessed some very promising impacts.
The main impact is that group members now have the ability to invest in their businesses, beit farming, retail, catering, or anything else.
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 that, otherwise, could not be met.