Savings Groups

Savings Groups

Why?

Many northern Ugandans live on less than $2 a day. They operate small businesses selling produce in the local market. Their income is often irregular and their earnings depend on the success of the day. They do not earn enough to access traditional financial products or even micro finance. Saving groups allow thrivers to build assets and access credit.

Savings groups allow each member to save a little each week.

How it works

	Saving Each week the group comes together to save. Each Member saves as much as she can into a cash box, and the total is deposited in the group’s bank account.
	Borrowing Once there is enough in the savings box, group members can request loan. The borrower presents a plan on how she will use the money, and the group votes on its merit. Loans given by savings groups have the lowest default rate.
	Disbursement At the end of the year savings are returned and interest is split among the group. It comes at a time when households have their largest expense – school fees.
The cycle starts again. With each year thrivers build up assets and climb their way out of poverty.

Not just saving

Many of the groups have developed additional ways to support each other.

Welfare – An important aspect of many groups is welfare. Each week members pay a little into a common fund. If a member falls ill, the group contributes towards paying her medical bill.

Rotating fund – in addition to regular savings, some groups operate a rotating fund. Every member contributes each week, and one member leaves with the total. The next week everyone contributes again and another member leaves with the total. This continues each week until every member has left with the pot.

Results