What are savings groups and why are they awesome?

Do you know what a savings group is?

It’s a term we use often at World Vision, but feedback from our supporters has shown us that many people aren’t familiar with the term.

A savings group is a group of people who work together to save money. They contribute to a common fund and can request loans, repaying with interest that goes back into the fund. At the end of a set term, the savings and interest are distributed for group members to use.

Savings groups are a powerful tool for helping people in low-income communities build economic security, especially for the 1.4 billion adults worldwide who don't have access to formal banking institutions. Many live in rural communities where transportation issues or low population density prevent banks from setting up branches. Families in these communities face barriers to saving money, accessing credit and handling financial emergencies.

Savings groups offer a practical, community-driven solution that helps members increase their financial resilience together. Group members can:

• Increase their savings.
• Borrow money without being subject to high interest rates.
• Cover household needs like school and medical expenses.
• Start, maintain or expand their income-generating activities.
• Increase their sense of agency, with the power to make choices that will shape their futures.

The groups often become transformative social networks, with members supporting each other through both challenges and successes.

Recent research found that every dollar invested in World Vision Canada’s community-based savings groups generates over $5 in economic benefits for participants, like increased income and financial stability.

Our model for savings groups is called Savings for Transformation. It connects the community’s most vulnerable and marginalized people to a savings group so that those who are often left behind—like women and people with disabilities—can benefit. By building up their savings, the families develop financial skills and create a safety net for emergencies. Ultimately, they can improve their ability to meet their children’s needs with better nutrition, healthcare and education support.

Do you know right now, 1,597 savings groups are operating in communities where we work? That’s more than the number of branches run by Canada’s largest bank.

Curious? Try World Vision’s savings group approach for yourself

The basic idea of the savings group is actually quite simple and with some modifications, could even work well with children. Read on for step-by-step instructions on how to start your own group. (We’ve written with families in mind, but this could work with a homeschool co-op or school club as well.)

Starting a simple savings group can help you and your kids build financial skills like saving, borrowing and budgeting. Beyond the financial benefits, it may:

• Strengthen your bonds as you work together.
• Build confidence in your kids as they set and achieve goals.
• Develop leadership skills and long-term thinking.

Follow these six steps to start a simplified savings group with the kids in your life.

Step 1: Call a meeting!

Pick a time when moods are bright and bring your crew together. This is your chance to explain what a savings group is and get everyone excited about the possibilities. Talk about:

• Why learning how to save money is important.
• How the system works, with everyone contributing.
• What goals you’d each like to save for.

Invite everyone, especially the kids, to share their ideas. For extra motivation, give your group a creative name.

Step 2: Create a constitution

Make it simple, covering the basics:

• Set a schedule for your meetings, perhaps weekly or monthly.
• Agree on the dollar amount that each share will be worth. Members can “purchase” up to five shares each meeting.
• Create borrowing rules —how will the members request, approve and repay loans?
• Decide how decisions will be made, by consensus or a majority vote.
• Determine how long your savings cycle will go. Three months? Six months? A year?

To make it official, write everything down and have everyone sign their names as a commitment to the group.

Step 3: Choose your leaders and roles

Work together to decide who should do these special jobs. You can rotate so everyone gets a chance to lead and learn.

• The chairperson leads meetings and makes sure the rules are followed.
• The record keeper writes down every member’s contributions, loans and repayments in a simple notebook.
• The treasurer keeps the money safe between meetings—ideally in a locked box.

Step 4: Start saving

At your kick-off meeting, be patient as everyone learns their new roles. Let the treasurer collect the contributions as the record keeper documents them.

Tip: Young children might enjoy tracking their contributions on a sticker chart.

Step 5: Borrowing and lending

When someone decides to request a loan:

• Discuss the purpose of the loan and decide if the group will approve it.
• Decide on a reasonable repayment period.
• Charge a small “service fee” (e.g., 5 per cent) which will go back into the fund to grow the savings.

Step 6: Share the wealth and celebrate your savings

At the end of your savings cycle, hold your “share-out” meeting. Make it a true celebration with a special dessert or favourite family meal. Divide the money you’ve saved and interest collected among the group members according to the number of shares each person purchased. Ask each other:

• Do you want to continue with another cycle?
• Do you want to make any changes?
• What new goals will you set?

A few tips for success

• Keep meetings short and focused—15 minutes is probably enough.
• Use a simple notebook to track contributions and loans.
• Be flexible! Adjust contribution amounts or rules as needed to keep everyone engaged.

Creating a family savings group can be a fun and practical way for kids to learn about financial literacy. Even better, it's a way to start conversations about the challenges families around the world face, and how change is possible when we work together.