On the 22nd of July members of RESULTS attended an event hosted by the Microfinance Club and Barclays Bank focusing on Voluntary Savings Groups. Kim Wilson, Matt Griffith and Malcolm Harper, co-editors of a new book ‘Financial Promise for the Poor’ looked at ways in which voluntary savings groups help to build microsavings across different regions creating a perfect subject for debate with questions raised by representatives from international organisations, pressure groups and of course the financial world.
Voluntary Savings Groups known as ROSCAs, kommittis, tontines, etc. exist in many shapes and forms and their most successful beneficiaries are women. Many of these women have set up, managed and taught their communities about this form of financial management, enabling many other individuals along the way.
Kim and Matt explained that while such groups represent the nucleus around which MFIs have often constructed their own models, they are more than just a ‘stepping stone to formal microfinance’. The Q&A session at the end of the presentation created an interesting debate thanks to Malcolm Harper who challenged conventional microfinance tools and used sound examples from the developing world to explain the success of voluntary savings groups. Some conclusions were that these groups show more efficiency than big, formal financial institutions; they are only profitable to group members and therefore less likely to encourage conflicts of interests at multiple levels. Moreover, individuals do not feel trapped into continuous indebtedness and dependence on donors and NGOs. The session was concluded by a reference to ways in which these voluntary savings groups empower individuals as they break bonds of financial indebtedness and helps individuals find, monitor and support each other in their path to financial security.