Savings groups: A little saving, a lot of progress

As many as 1.4 billion people around the world are “unbanked,” meaning without formal chequing or savings accounts and limited, or no, access to institutions like banks or credit unions. Such people are primarily women, those with low education and the poor. However, savings groups can address this challenge. They can provide communities with the tools to help lift themselves out of poverty and bring a measure of empowerment to traditionally disenfranchised groups like women.

Savings groups are community-based and member-owned groups of 15 to 25 people who contribute communally to a fund and take loans from that fund. The aim is to build resilient, sustainable livelihoods among members by increasing their financial literacy, providing access to funds for household use.

A secondary fund, known as the social fund, is also created within each savings group. The social fund provides small grants for members experiencing emergencies and, in some cases, can support vulnerable children within the community.

To analyze the effectiveness of World Vision Canada’s support for what are called Savings for Transformation (S4T) groups, consulting firm Limestone Analytics conducted a cost-benefit analysis of 78 S4T implementations across 21 countries, from 2019 to 2021. The cost-benefit analysis revealed that, overall, the investments in S4T have been a cost-effective use of Canadian funds. The benefits to participants totalled US$48 million, which translates into US$5.62 in economic benefits for every dollar spent.

For a more detailed look at the S4T implementations and their results, please see the executive summary, Savings 4 Transformation: Cost-Benefit Analysis.

If you require access to the accessible version of this summary, please contact us at 1-866-595-5550.