Research Brief: Practices & Possibilities in Savings Groups

Not too long ago, I had the opportunity to attend a savings group in rural Tanzania with The MasterCard Foundation’s partner Swisscontact.  The program works with young women and men, and all of the Mavuno (savings group) members were less than 25 years old.  During the meeting I attended, the young people each came to the front of the room to hand in their cash savings, as the secretary and treasurer dutifully noted each deposit and loan in the group’s ledger book.  The process repeated itself many times over for each Mavuno group member.

Young people across the world demonstrate some striking similarities.  Adolescents where I live, in Toronto, often take out their mobile phones to occupy themselves in a quiet moment. The Mavuno members in Tanzania weren’t very different.  Mobile phones were out in full force as the savings group conducted its business.  It was a striking picture: young people holding onto the technological tools of the future, building their own futures through savings, while the savings themselves were recorded with old-fashioned pencil and paper accounting.

How will technology transform savings groups in the future?  Savings groups have been gaining attention as an empowering mechanism for financial inclusion, and the evidence base in this critical area is growing. However, much still needs to be done to gather and disseminate best practices and explore future possibilities in this field. Last year, we commissioned an exploratory study in order to better understand the needs and preferences of savings group members themselves.

The research included surveys with nearly 500 savings group members across five countries and six organizations. The research brief highlights some of the insights offered by group members, including interest in linking with formal financial institutions, mobile banking, and technology-enabled training and monitoring tools. The research found that some savings groups are already working with financial service providers, or are using some preliminary technological tools.

Perhaps in the future, mobile phones will be more than mere distraction for Mavuno group members.  Perhaps mobile technology will instead be a critical part of the group’s functioning, offering connection to financial service providers or electronic training materials.   We don’t know what the future will bring, but we’re excited to watch and learn as people choose the tools and resources that best serve their needs.