In Their Own Hands

How Savings Groups are Revolutionizing Development

Jeffrey Ashe (Author) | Kyla Jagger Neilan (Author) | Frances Moore Lappé (Foreword by)

Publication date: 09/15/2014

In Their Own Hands
A better way to fight poverty: Ashe and Neilan show that savings groups are simple, extremely low cost, self-managing and spread virally "there are savings groups in 100,000 villages in 65 countries Sponsored by Oxfam America: This book was developed wit
  • A better way to fight poverty: Ashe and Neilan show that savings groups are simple, extremely low cost, self-managing and spread virally-there are savings groups in 100,000 villages in 65 countries
  • Sponsored by Oxfam America: This book was developed with Oxfam America, part of an international coalition of Oxfams operating in 90 countries-in 2005 Ashe and Oxfam, with their partner Freedom from Hunger, pioneered a program to expand savings groups worldwide.

Two and a half billion people worldwide, too poor and too rural to be served by traditional financial institutions desperately need a better way to save and borrow. Jeffrey Ashe and Kyla Jagger Neilan say the answer is savings groups.

In savings groups, members put what they can in a communal pot and make loans to individual members for needs like buying food to survive the "lean season" before the harvest, building a business, investing in livestock, or paying school fees. Once a year, the entire pot plus interest on loans is divided among the members. Unlike other poverty alleviation options, savings groups are run entirely by their members, and, they spread by word of mouth from village to village, allowing them to reach remote areas with remarkable success. By catalyzing the problem-solving capacity of the poor they avoid subsidies, debt, dependency, and high costs while reducing hunger and building assets and solidarity.

Ashe and Neilan show that applying savings group principles could revolutionize development in areas as diverse as health, agriculture, education and grassroots political empowerment. "Being organized gives us courage," as one woman said. It is their courage translated into action that explains the success of "in their own hands" development.

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Overview

A better way to fight poverty: Ashe and Neilan show that savings groups are simple, extremely low cost, self-managing and spread virally "there are savings groups in 100,000 villages in 65 countries Sponsored by Oxfam America: This book was developed wit

  • A better way to fight poverty: Ashe and Neilan show that savings groups are simple, extremely low cost, self-managing and spread virally-there are savings groups in 100,000 villages in 65 countries
  • Sponsored by Oxfam America: This book was developed with Oxfam America, part of an international coalition of Oxfams operating in 90 countries-in 2005 Ashe and Oxfam, with their partner Freedom from Hunger, pioneered a program to expand savings groups worldwide.

Two and a half billion people worldwide, too poor and too rural to be served by traditional financial institutions desperately need a better way to save and borrow. Jeffrey Ashe and Kyla Jagger Neilan say the answer is savings groups.

In savings groups, members put what they can in a communal pot and make loans to individual members for needs like buying food to survive the "lean season" before the harvest, building a business, investing in livestock, or paying school fees. Once a year, the entire pot plus interest on loans is divided among the members. Unlike other poverty alleviation options, savings groups are run entirely by their members, and, they spread by word of mouth from village to village, allowing them to reach remote areas with remarkable success. By catalyzing the problem-solving capacity of the poor they avoid subsidies, debt, dependency, and high costs while reducing hunger and building assets and solidarity.

Ashe and Neilan show that applying savings group principles could revolutionize development in areas as diverse as health, agriculture, education and grassroots political empowerment. "Being organized gives us courage," as one woman said. It is their courage translated into action that explains the success of "in their own hands" development.

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Meet the Authors & Other Product Contributors


Visit Author Page - Jeffrey Ashe

I’ve worked as a catalyst of social change for decades, and there is one lesson that continuously rings true: success happens when problem solving is “in their own hands”; failure occurs when others try to do it for them.

After graduating from UC Berkeley, I began my career in international development as one of the early Peace Corps volunteers in Ecuador. Assigned to a remote village, I developed a program in which my team of fellow volunteers and Liberation Theology nuns brought together village leaders to plan how to secure the land they were entitled to. As the village leaders brought agrarian reform to more villages, I realized that success was theirs, not mine. After leaving Ecuador and completing graduate studies in sociology at Boston University, I joined Acción International in 1975. As Acción’s deputy director, I led the first worldwide assessment of microfinance, which later became the framework for launching microfinance in Latin America and later Africa and Eastern Europe. Throughout the 1980s, I evaluated, designed, and led microfinance efforts in thirty-five countries, and in 1990, I brought microfinance to the United States with Working Capital, which soon had operations in eight US states, the West Bank and Gaza Strip, and Russia. In 1997, I received the award for microfinance innovation from President Bill Clinton.

After becoming disillusioned because microfinance was not reaching the world’s poorest, it was my evaluation of the Women’s Empowerment Program in Nepal in 2000 that taught me that there was another path to financial inclusion. By sidestepping financial institutions and instead training small groups to save and lend, village women were being reached at an unprecedented scale. Taking what I learned in Nepal, and later in India and Zimbabwe, I joined Oxfam America in 2005 as Oxfam’s director of community finance. It was there that I designed and led the Saving for Change initiative, which grew to organize more than 650,000 rural women into tens of thousands of savings groups across five countries with minimal staff and at low cost, capitalizing on their capacity to lead their own development.

Currently, as a research fellow at the Global Development and Environment Institute at Tufts University and as a fellow at the Carsey Institute at the University of New Hampshire, I am part of a group of “Savings Revolution” leaders working to bring savings groups to one million rural communities over the next decade. Through the courses I teach at Brandeis University and Columbia University, I am dedicated to inspiring the next generation of change agents. At the conferences and universities around the world where I am invited to speak, my message is that the key to change is “in their own hands.”



Visit Author Page - Kyla Jagger Neilan

Kyla Jagger Neilan is co-author of Jeffrey Ashe's In Their Own Hands: How Savings Groups are Revolutionizing Development (2014).  She contributed research to Naomi Klein's This Changes Everything: Capitalism Vs. the Climate (Simon & Schuster, 2014).  She has also contributed research for the United Nations World Food Program, Oxfam America, and Catholic Relief Services including fieldwork in Mali, the Central African Republic, Ethiopia, and Tanzania.  Kyla holds an MPA in International Development from Cornell University's Institute for Public Affairs and a BA from Oberlin College in Third World Studies, Environmental Studies, and French.  She received awards for gender and environmental research and fellowships from myAgro, the Cornell Institute of Public Affairs, and Environment Ohio Research and Policy Center.

Kyla is a practitioner, researcher, and activist for social justice and food sovereignty. She is fascinated by the intersections of gender and food systems at the margins. Her work in humanitarian emergencies supports people in crisis. Writing and activism allow her to be in solidarity with social movements that address root causes of crisis.

Kyla is from the northeast United States, and has worked as a humanitarian aid worker in Central and West Africa, including Mali, the Central African Republic, Nigeria, and Chad.



Foreword by Frances Moore Lappé

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Table of Contents

Foreword by Frances Moore Lappé

Preface by Ray Offenheiser, Oxfam America

Introduction: Beginning a Savings Revolution-They Know How

1. Learning Savings Group Principles

2. A Group Meeting

3. "Dependency is Not Empowering"

4.Getting Started with Saving for Change

5. The Most Productive Asset of All: Empowering Friends and Neighbors in Latin America

6.How Do We Know It Works?

7. Savings Groups as a Platform for Other Development Initiatives

Conclusion: Bringing Savings Groups to 50 Million People

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Excerpt

In Their Own Hands

CHAPTER 1

Guiding Principles for Saving for Change

After years of promoting savings groups, I have identified nine principles that explain why the number of savings groups has grown so quickly, how they have replicated organically, and why these groups survive in the face of economic and political crises, armed insurgencies, drought, and hyperinflation. These same principles could be applied to any development initiative attempting to reach not just hundreds but thousands—even millions—of people at minimum cost in a way that is robust enough to continue long after outside staffing and funding has ended.

Start With a Vision of Scale, and Design for Viral Replication

Sir Fazle Hasan Abed, the founder of Bangladesh-based BRAC, the world’s largest NGO, said, “Small is beautiful, but big is necessary.” Every rural community is unique, but our task was to build a “good enough” intervention that could be duplicated widely. The sign of a well-implemented good idea is that others adopt it as their own. In Mali, well over half of the groups currently in place were trained by volunteers. Recall the conversation with Sali Coulibaly.

Less Is More, and the Simpler the Better

The key is to introduce a new idea and get out of the way as soon as those you are assisting can do it themselves. With too many visits and too much help, the groups remain dependent. My team developed a solution that met villagers’ needs and was to be run by women in rural communities who had little or no formal schooling. For them, sticks, seeds, and pebbles were used to quickly tally outstanding loans, a system that proved to be far more accurate than written records. Simplicity translates into scale, low cost, and the spread of ideas by word of mouth.

Build on What Is Already in Place

Savings groups improve on traditional revolving savings groups—ROSCAs—which are already widely understood in the communities where we work. While savings groups and ROSCAs share the requirement that groups select their members, save regularly, and hold each other accountable, savings groups add variable savings, taking out loans when and in the amounts desired, improved record keeping, charging interest on small loans, and greater transparency. I knew we were on the right track when, after a few minutes of describing Saving for Change to a woman in Senegal, she responded, “I understand how this works. It’s like a tontine, only better.”

Be Sustainable

While many development programs have no lasting impact, approximately 95 percent of the Saving for Change groups in Mali, some of them trained almost ten years ago, are still saving and lending. Most are visited only every few months or not at all. While operating independently, these groups have survived a coup, an insurgency in the north, a major drought, skyrocketing food prices, influxes of displaced people, and faltering institutions, so there is little reason to believe they will weaken in the future.

Keep Costs Low

There are never enough resources. For an initiative to grow quickly and organically, costs must be low. For Saving for Change in Mali, support totaled $1,500 per village, which included training several groups and then progressively less frequent monitoring over three years. The documented impact justifies the modest cost—a decrease in chronic hunger, increased assets, more savings, reaching the poorest, and word-of-mouth replication within the village and neighboring villages as volunteers from established groups trained groups on their own account.

No Giveaways

Dependency kills innovation and restricts the viral spread of ideas. Alfred Hamadziripi, the Zimbabwean director of the CARE Village Savings and Loan Association (VSLA) program, told me of the disastrous first months of the program in his country. Each group received a matching grant equivalent to the amount they saved. The groups saved, received the match, and disbanded. Their motivation was to receive a handout, not the disciplined business of mobilizing and managing their own savings. CARE dropped the matching requirement in Zimbabwe, and the number of groups soared. In Saving for Change, the “no-giveaway” rule also means that groups pay for accounting forms and cashboxes. If there are no giveaways, those who choose to join groups fully recognize that the eventual success (or failure) of the venture is entirely in their own hands.

Insist on Local Control

Garnering local ownership can be a challenge, but it is a necessity. Local control allows the community to drive instead of only being along for the ride. The genius of savings group programs is that they can be carried out by local NGOs that devolve the responsibility for training more groups to volunteers. If groups depend on the presence of an outside staff person, they will disband when the outsider leaves.

Establish High Performance Standards and Insist on Meeting These Standards

Meeting high performance standards must matter in development work as much as it does in the business world. Know the targets that you want to reach and ensure that you get there. For example, each team of ten paid animators and a supervisor is tasked to introduce Saving for Change to three hundred villages with a combined population of three hundred thousand inhabitants. There were clear objectives for each team and each paid staff person. Each team was required to facilitate the training of eight hundred groups, of which two hundred were trained by the staff—one per village—and the remaining six hundred were trained by volunteer replicating agents who would train and support more groups after the staff was reassigned to another cluster of villages. Once objectives are clear, achieving them is much easier.

Embrace Learning and Innovation

Allowing for local control and respecting community input means constant improvement. Innovations from one village can spread only if the model is flexible and everyone involved is committed to learning. Using the principles of appreciative inquiry, NGO staff were periodically brought together and went through an exercise in which they were asked to define success in specific terms—a growing savings rate, excellent record keeping, and high attendance at meetings, among others. They were asked to rate how well the groups they were working with were meeting these objectives and then to come up with a plan for improving performance in any areas that lagged. Finally, to bridge the gap between planning and action, staff members were asked to commit to a specific action when they got on their motorcycles the next day to start to resolve this issue and to specify how success would be measured.

These principles are remarkably simple. In essence, each reflects the title of this book: In Their Own Hands: How Savings Groups Are Revolutionizing Development. If we truly believe that “they know how” and that our presence is to serve as a transitory catalyst of change, then the rest follows—scale, simplicity, building on what is there, sustainability, low cost, no giveaways, local control, setting standards, and embracing learning. I believe that this is the surest path to reaching the more than two billion people who could benefit and underpins my assertion that improving the lives of the poor need not be as complicated and costly as we once feared.

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Endorsements

“Jeff Ashe gives us one of his biggest dreams yet. People living in poverty organizing and using their own capital to provide the savings and credit that help them withstand shocks and take advantage of opportunity. What's more, Ashe and Neilan show us that this dream is being realized millions of times and spreading rapidly across the globe.”
—Larry Reed-Director, Microcredit Summit Campaign

“Most books on community finance are either anthologies or manuals. This one is neither. A radical departure from other works in the field,
In Their Own Hands traces the long sweep of financial empowerment via histories viewed through the single lens of one author. The book is essential for any practitioner interested in helping the poor transform small amounts of money into meaningful ways of changing their lives.”
—Kim Wilson, Lecturer, International Business and Human Security, The Fletcher School of Law and Diplomacy, Tufts University

“Jeffrey Ashe and Kyla Neilan's new book, In Their Own Hands, presents a stunningly simple, thoroughly tested, and visionary new way for the poor to save and borrow. In Mali, the outcome was dramatic: less hunger, ownership of more livestock, and more clout for village women. The remarkable difference with savings groups is how they are able to achieve scale—not through building financial institutions as microfinance has done but by catalyzing the problem-solving capacity of the poor. The ideas in this book have the potential to turn the development field on its head.”
—Paul Polak, coauthor of The Business Solution to Poverty and Chairman, Windhorse International

“I can think of two good reasons to read In Their Own Hands. One, if you give a damn about extreme poverty, here is another practical tool in the arsenal of financial inclusion. Two, amidst all the chatter about listening to and capturing the wisdom of impoverished communities and indigenous peoples, this book is a road map on how to do it. The author's economic development career reveals a professional courage from which we can all learn.”
—Jonathan C. Lewis, founder and Chair, MCE Social Capital

“Since I met Jeff in Ecuador in the '60s, he's been turning conventional wisdom on its head. He does this now for the financial sec- tor and for the development community grown too comfortable with in-the-box thinking. The title of the book says it all—In Their Own Hands. Those of us who want to help need to break from the past, trust the impoverished, and get out of the way so that they can empower themselves to save and be agents of their own development.”
—John Hammock, former President, Accion International and Oxfam America

“I have known and admired Jeff Ashe for almost forty years. I consider him—along with Muhammad Yunus—one of the most innovative practitioners of the global microfinance movement. He was my principal mentor in developing the methodology of Village Banking. When in the year 2030 the world celebrates the end of severe poverty on our planet, Jeff's tireless efforts to promote rural savings groups will be heralded as the single most effective, bottom-up strategy for ‘leaving nobody behind.' And for the next generation of microfinance practitioners, In Their Own Hands will be justly recognized as the best end-poverty textbook ever written.”
—John Hatch, founder of FINCA International and cofounder of the Microcredit Summit

“Modern savings groups are an improvement on the self-help tools poor people have always used to manage their money. This short and clearly written book shows how over 100,000 villages in the developing world have come to use and value such groups and why it's important to spread the message to millions more.”
—Stuart Rutherford, author of The Poor and Their Money, coauthor of Portfolios of the Poor, and founder of SafeSave

“Sometimes the most powerful ideas are the simplest. This book shows how a simple way for communities to accumulate savings has taken off—with no new technology nor costly microfinance infra- structure. In Their Own Hands turns upside down the most common assumptions about what poor households need and can accomplish.”
—Jonathan Morduch, Professor of Public Policy and Economics, Robert F. Wagner Graduate School of Public Service, New York University

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