FULL TITLE: Entering the Field: Learning the Basics of Starting a Microfinance Program ROOM: Tsavo B Facilitated by Oxfam America: Mr. Jeff Ashe (USA) Mr. Soumaila Sogoba (Mali)

1. SAVING FOR CHANGE Mass Sale, Group Managed Microfinance for the Rural Poor Microcredit Summit Nairobi April 10, 2010

2. CHALLENGE OF REACHING THE POOREST Microfinance a success 150 million worldwide But: 80% or more not reached rural poor largely left out Because: Delivery costs too high Credit needs too small Only 1/5 need credit All need savings

3. Saving for Change Reaches those Left Out (Focus/Scale/Impact) Starts with saving Highly profitable (for members) Vast scale Simple/Low cost Builds on local capacity/knowledge Delivery by NGOs Self-replicating Survives No external fund Constant learning

4. CREDIT LED MICROFINANCE Microfinance Institution Bank Credit Union Loan Loan with Interest Borrower

5. $ SAVE

6. $ BORROW

7. SAVE AND REPAY $ + $

8. $ DISTRIBUTE FUNDS at END OF CYCLE

9. GROUP LEADERS CREATE NEW GROUPS $ $ + $ Group 1 Group 2

11. 85% of fund on loan

12. Model virtually fraud proof

14. SfC Model Current Savings lose 20% per year Current Lending Costs money Home Animals Jewelry Tontines Remittances Money Lenders Suppliers MFIs

16. Mali: Chronic Food Insecurity Mali 171 of 173 HDI 1/3 rural households food insecure 58% of rural households below $1 per day 28% villages food crisis Average SfC group member Illiterate woman Had malaria past year 5 children Hungry part of the year

18. 19% members of tontines (ROSCAS)

20. WHAT MEMBERS VALUE MOST

21. Member Satisfaction with SfC

27. SfC Impact on Food Security Opens investment opportunities in trading and agriculture With more business more money more food available and more money to buy it. When fund divided often used for food and seeds Less short term fluctuations in Income/reduces risks Reaches the poorest/ women heads of household With more prosperity less need to migrate Many groups purchase grain to use and resell during the hungry season Hunger now less likely

28. Social Impact Extends women’s social networks Empowerment Increased women’s’ role in the community Increases confidence, leadership Enhanced cooperation, mutual assistance, and solidarity among members and communities. Enhanced a “woman’s ability to manage her nuclear sub-unit of the household”. Less stress and increased family harmony Helps households headed by women, a growing trend in Mali, are also benefiting from the program. .

29. Group Assets $ power Household Change Village

30. To sum up Saving for Change will not “eradicate poverty,” drought and declining soil quality, endemic malaria and lack of markets and infrastructure also factor in, but the lives of women members and their families have improved. Saving for Change provides a more stable platform that allows for the accumulation of assets and reduces the need to sell assets in emergencies. SfC is a key leverage point to promote sustainable development in vulnerable villages.

42. To Introduce SfC to New Region over Three Years With $400,000 investment ($25 per member) 300 villages with SfC 800 groups, 16,000 members Includes: Local partner costs Costs of NGO selection, training, supervision, monitoring and evaluation

43. To Introduce SfC to New Region over Three Years With $400,000 investment ($25 per member) 300 villages with SfC 800 groups, 16,000 members Includes: Local partner costs Costs of NGO selection, training, supervision, monitoring and evaluation

44. How it Works NGO team of ten animators and coordinator recruited and trained Each animator assigned 30 villages Over three years each animator trains one groups in twenty villages In each village trains one to three replicating agents who train rest of groups in the village Over three years animators train 200 groups, replicating agents train 600 groups Replicating agents train/support additional groups in future.

45. Following Procedure insures Quality at Low Cost Careful selection of partners Joint hiring of coordinator and animators Tight MIS Simple manuals Clear ambitious performance expectations Constant learning and improvement Oxfam America has SfC teams in Senegal/Mali, Cambodia, El Salvador to provide this assistance.

46. How much does it cost? For five million dollars: 2,500 villages ($2,000 per village) 200,000 group members 10,000 groups Four to five years Sufficient “critical mass” to attract more donors/government. Potential demand 40,000 to 50,000 groups in country of 10 to 15 million inhabitants A mass scale/low cost/locally controlled/locally financed strategy for food security is the key