World Renew approaches its ministry by looking at all people as God’s image bearers. Instead of thinking of those in poverty as being desperate individuals in need of charity, World Renew views them as men and women with God-given talents who with encouragement and opportunity can reach their full potential. One of the greatest successes we’ve had in tapping in to this potential is through community groups and savings programs.
World Renew’s work with the Nkhoma Synod of the Presbyterian Church of Central Africa (NRD) is a great example of this. World Renew began working with NRD in Malawi in 1990. Its main program was to help form groups of 25 to 200 women, and then support those community groups with interventions such as training in health and nutrition, providing goats and seeds, monitoring the weight of young children, and teaching new agricultural techniques.
Watch “Making Dreams a Reality: Village Savings & Lending in Malawi“
After 20 years, the communities had made great progress. Unfortunately, no groups had “graduated” and they still relied on World Renew and NRD for loans and grants.
In 2009, that all changed. World Renew consultant, Nancy Kimani, was invited to visit with a group that had heard about and started up a Village Savings and Loan (VSL) group. The VSL model consists of a group of 10-25 people who save together and then take out small loans from those savings. Members of the group save through the purchase of “shares” in the group fund. They purchase anywhere from one to five shares at each meeting, and record their shares in their individual passbook.
As the fund grows, members can borrow up to three times the value of their shares, but they also pay a monthly service charge for the loans they take out. These loans and fees are also recorded in each individual passbook.
“I decided to borrow some money and buy some flour,” said Levian Sinoya, a woman whose family had been making their living on a small farm. “Then I started making bread and was able to buy shares.”
Today, Levian and her husband operate a successful bread-baking business. Last year, they used the income they earned from their shares in the VSL group to build a clay oven and make pans to increase their baking potential.
“We never go hungry,” she said. “All this was possible because of the VSL group loan.”
“We never go hungry,” she said. “All this was possible because of the VSL group loan.”
The loans are disbursed and repaid once every four weeks. In this way, the money continues to circulate and grow. The best part is that the whole process is managed by group members. They set the price that they will charge per share in their fund, and they also agree on an appropriate monthly service charge for the loans. All of the passbooks are saved in a locked box between meetings, and three different members hold the keys to three different locks on the box.
After a 36-week cycle, all the outstanding loans are repaid and the profits from the loan fund are shared out to members. They can then begin a new cycle.
Inspired by her visit with the Malawian group, Nancy Kimani Hinga asked World Renew for a small loan so that she could train four groups of 25 women in the VSL model. Two years later, there are now 68 community groups in that region participating in VSL programs. Another community organization has seen the good work being done by NRD and started 12 additional VSL groups. That’s 80 groups or nearly 2,000 people, who are being reached by the program. In addition, NDR has started more than 60 more VSL groups in other parts of Malawi.
What’s more, when World Renew did an evaluation of its work in Malawi, it found that participants in VSL programs were less likely to ask for outside assistance than other groups. Traditional community groups frequently requested more goats, more seeds, more latrines, etc. In contrast, participants in the VSL groups talked about how they had purchased their own seed, their own goats, and had plans to purchase land and invest the income.
“I sell vegetables and use that money to buy shares in my VSL group,” said Aliya Black, one participant who has used her VSL group to achieve her family’s goals. “From the money I earned, I bought a mattress, a blanket, school uniforms, and to pay my children’s school fees. I used other money to realize a dream I had long cherished – to make improvements to my house. I bought cement, which I used to strengthen the outside of my home.”
In Bangladesh, World Renew has seen this type of success go a step further. World Renew began its self-help approach in Bangladesh in the 1980’s. In the 1990’s, World Renew staff and its partners began to look for a way to move people beyond financial empowerment to also empower them socially and politically. It developed a multi-tier system that is now being used by thousands of self-help groups across the country.
Similar to the Malawian Village Savings and Loan program, the Bangladesh approach begins with community groups. Men and women from a specific village or region are encouraged to meet together on a regular basis to pool their savings and manage their small loans. They meet with men in one group and women in another. The groups are also often made up of members with a similar ethnic or religious background. After about a year, each primary group selects a member to represent them at a new association called the “Central Committee.”
Each Central Committee represents four or five villages and is comprised of men and women from the various primary groups. The Central Committees become an umbrella group for the various primary community groups in their geographic areas. These Central Committees encourage shared learning between primary groups and can also administer a larger loan fund made up of contributions from various primary groups that enable community initiatives such as wells or latrines to be built.
Anwar Husain and Momata Begum, for example, live in the Islampur region of Bangladesh. They are members of two different primary groups. Through their Central Committee, Anwar and Momata became connected and decided to start a joint poultry farm using a larger loan of about $550. They currently raise 2,400 chickens. They have paid off their loan and sell eggs as a profitable business.
Within a year or two of forming a Central Committee, a third tier is started. This is called the “People’s Institution.” Each Central Committee appoints one or two members to serve in the People’s Institution. Each People’s Institution then becomes a civil society organization that represents an entire Bangladesh sub-district or “Thana” – about 25,000 people.
Because the People’s Institutions are comprised of the various Central Committee and primary groups, their make-up includes men and women from all ethnicities and religions of the region, and their voice is representative of the whole population.
As People’s Institutions, members can tackle broader issues that affect the population as a whole. For example, People’s Institutions have helped more than 600 families gain legal access to the land they had been living on but never received legal title for. People’s Institutions also use contributions from the various member groups to administer a health fund that delivers vital services to communities that need them and links those communities with existing health clinics.
“In our visits with communities, we hear again and again how group members unite together to improve their lives.”
Latifa Begum has been part of a primary group since 2001. She has also served on both the Central Committee and the People’s Institution for her area. Today, she is a well-respected leader in her community and has even helped people work together to raise enough money to repair the road leading to their village.
“At the People’s Institution level, organizing people is less about savings and more about providing leadership and helping people work together on common goals,” said World Renew staff member, Kohima Daring. “In our visits with communities, we hear again and again how group members unite together to improve their lives.”
One woman from a group in Najirpur, for example, recently told Daring, “Because we are working together, we have gained leadership skills and our relationships at home, with each other, and with other community members are better.”
Similarly, when Daring asked others in this group why they would continue meeting and working when they had already improved their lives so much, they answered, “We are thankful to God for His blessings to our lives and now it is our responsibility to teach our children and others. We want to see our community becomes a peaceful community where we will live values-based, healthy, justice-filled lives.”
Recently, World Renew’s partners in Bangladesh have taken this approach one step further to add Regional Federations that represent a variety of People’s Institutions. Praise God for this success and ask for His continued blessing on the work in Bangladesh, Malawi, and elsewhere around the world.
