Women Saving for Change - A WOW! e-Brief

 

WORLD NEIGHBORS SAVINGS AND CREDIT GROUPS

World Neighbors long-term objective for the areas in which it works is to help communities build their capacity to determine their own future. World Neighbors first began incorporating savings and credit groups into their programs in 1988, in Nepal, as part of the construction of drinking water systems in the community. World Neighbors realized that many members of the group were struggling to repay debts to moneylenders and at the same time maintain the drinking water system. The community decided to pool their assets and form self-managed savings and credit groups.

The success of women in these groups was outstanding. They were able to overcome debt exploitation while improving their own income at the same time. Eventually, the women’s groups built up enough money from interest to support a nonprofit hospital in the Ramechhap district in central Nepal. To date, the local savings and credit groups have generated over $400,000 from interest revenue and savings.

Since the formation of the Nepal savings and credit groups, World Neighbors has been incorporating this tool into many of its programs in other countries. This strategy is often used as a way to mobilize community assets, whether they be money, seeds, tools or livestock. The support of women’s savings and credit groups is especially important in World Neighbors’ approach to gender equity because these groups often have the effect of increasing women’s position within the community. Savings and credit groups provide women with the opportunity to improve their leadership and communication abilities as well as to gain valuable training and skills. Through the process of participating in these groups, women gain self-confidence and often become more involved in decisionmaking within their families and communities.

World Neighbors role in its partner communities is not to manage development but rather to support communities as they increase their ability to manage their own development process and find lasting solutions to critical needs. Because of this, World Neighbors works to avoid creating dependency within the community on outside organizations.

World Neighbors does not usually provide savings and credit groups with initial funding; rather, the groups are created by the contributions of their members over the course of several months. In order to encourage quicker results, however, World Neighbors sometimes provides external capital after members have proven their commitment to the success of the group. World Neighbors does not expect repayment of this funding, but it does require the group to transfer seed money or other assets to help the formation of a new group.

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One of World Neighbors’ most successful partner programs is Tamakoshi Service Society (TSS) in Nepal. TSS has now established over 500 savings and credit groups with over 11,000 members, most of whom are women, and who mobilize over $200,000 annually. TSS has helped over 150 communities construct drinking water and irrigation systems that reach over 27,000 people. The revenues generated by TSS support mobile health clinics and the construction of primary schools for marginalized communities. The credit and savings model utilized by World Neighbors and TSS will soon become a model used by the United Nations Development Program (UNDP). The UNDP is working with TSS to expand their model to 20 of the 75 districts in Nepal.

The example of TSS demonstrates World Neighbors commitment to creating sustainable development. World Neighbors works with communities to create integrated strategies that address other problems in addition to economic poverty. Savings and credit groups are therefore linked to other development activities, such as agricultural production, increasing gender equity or improving access to health care, that help to improve the overall quality of life of people living in partnering communities.

Success Story: Mathura Kunwar

Mathura Kunwar lives in Upper Gairathok, a small village located in Nepal. The lack of opportunities for for earning a living, accessing modern agricultural skills and utilizing irrigation make life difficult in this village, which is surrounded by barren hills. Mathura lives with her husband and five children.

Mathura, who is now chairs her local women’s savings and credit group, was first introduced to this concept by Semaj Sewa Samuha, World Neighbors local partner organization in the area. Mathura first became interested in savings and credit groups because of the long-term objectives of community development and women’s empowerment.

After the meeting, Mathura was determined to form a women’s group, Women Development Group, which now has 12 members and a fund equaling $415. The group members are expected to contribute monthly and they charge 24 percent interest on any loan the group disburses, which is much lower than the average 84 percent charged by local money lenders.

The group has provided more than just economic opportunities. Mathura believes she and the other members have gained confidence and feel more empowered. Mathura has had the opportunity to discuss reproductive health issues and services with local organizations and to talk with strangers who were conducting a census in the area.

At first, Mathura found it difficult to talk with strangers without the presence of her husband, but now she believes the situation is different. She and other women within the group have become less dependent on their husbands for monetary matters. In addition, members are able to take part in community development activities, like making clean water available, family planning, constructing latrines and raising livestock. Mathura asserts, “all these factors made us feel equal to men and we have also been able to enjoy our equal rights and role at home and in the community.”

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Photo credits for this page (from top to bottom):

1. Photo of the women of TSS in Nepal

2. Photo by Linda Jo Stern/ World Neighbors

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A WOW! e-Brief

Work of Women @ World Neighbors

October 2007

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