Growing the Wealth of the Poor - World Resources Institute

Box 2.3 WOMEN ON THE MOVE: SCALING UPWOMEN’S SAVINGS GROUPS IN NIGERMATA MASU DUBARA—MMD, FOR SHORT—MEANS“Women on the Move” in Hausa, a language of Niger and theAfrican Sahel (Allen 2002:1). It is also the name of a highlysuccessful savings and loan program based on women’s selfhelpgroups. The rapid growth and well-documented success ofthe program demonstrates that self-initiated local organizationscan become effective agents of rural development.This village-based savings and loan program began in 1991with six groups of about 30 women in Niger’s Maradi region,with funding and technical support from CARE International(Allen 2002:1). Today, MMD’s “accumulating savings andcredit associations” model provides small short-term loans andstrong savings returns to rural women across western and southernAfrica. As of August 2005, the MMD program had reached172,000 women in Niger, resulting in over US$5 million insavings (CARE International 2005:1). By the end of 2006,CARE’s Village Savings and Loan program, based on MMD’sprinciples, had reached 500,000 people across Africa—70percent of them women (CARE International 2007:10).An MMD group in a rural village typically consists of 30 womenwho meet on a weekly basis to make a predetermined contributionto a savings pot (FON 2001:1). The group decides eachmonth how it will use the savings. Most often, the funds gotoward small loans to petitioning members who make their caseto the group. The loans, with interest rates generally between10 and 20 percent, must then be repaid to the group 4 weekslater. Some groups decide to invest their savings in a groupbusiness (Allen 2002:10,19).At the end of a set time period—usually 9 or 12 months—thesavings group dissolves, evenly redistributing its funds amongall its members. The fund cycle is timed so that the redistributiontakes place in a season when extra funds are particularlydesirable—either before the holidays or during the agriculturalplanting season. Most groups re-form shortly thereafter tocontinue the savings and loan process. The program is attractivelargely because MMD members receive a median return of80 percent on their savings (Allen 2002:23).The rapid growth of MMDs across Niger and in other Africanstates illustrates the scaling capacity of demand-driven localorganizations when they are based on a simple model that issupplemented by effective capacity training. The MMD trainingwas initially provided entirely by CARE volunteers. Today,however, the program operates through a “train-the-trainer”model, whereby CARE officials work with select village leadersto bring the model to new areas. The change in strategy greatlyfacilitated the spread of MMDs. In the four years after the“train-the-trainer” model was adopted in 1998, the number ofMMD groups grew from 1,200 to more than 5,600, andmembership quadrupled—topping 160,000 (Allen 2002:13).Women in the region who are interested in forming their owngroup pay the local trainers a small fee to help establish theirMMD. During the first three months of a newly formed group,the trainers attend weekly meetings explaining the proceduresand working out the specific rules and the type of loan programthe women want to follow. After this “intensive period,” thetrainer sits in on meetings less frequently but is available toanswer questions through the end of the 8-month cycle thatnew groups typically use as a test period (Allen 2002:18–19).One key to the simple and flexible MMD model is that no literacyis required of any group members. Instead, the group usesprocedures like dropping pebbles into their savings safe-depositbox to mark the number of weeks they have been operating;other records are kept orally, with several women responsible forkeeping records, which are then reconciled at each meeting. Ifwomen want to contribute more savings each week, they areable to do so in a multiple of the minimum contribution and areconsidered to represent “multiple persons” in order to simplifythe payout process at the end. CARE learned from experienceabout the unique challenges presented by illiteracy and hasformalized these adaptive procedures in its model as a result(Allen 2002:19–20).74CARE’s role in MMD’s success exemplifies the changing role thatexternal support organizations often play in catalyzing and scalingup the efforts of local organizations. Its transition from a groundleveltesting and frontline service to an upper-tier training andadvisory organization has allowed CARE to move to the backgroundas local groups have stepped up, promoting local learning andownership of the program and ensuring that the growth of MMDgroups continues to be driven by local demand.