ENTERING THE FIELD: LEARNING THE BASICS OF STRATING A MICROFINANCE PROGRAM

The case of Saving for Change in Mali.

Arica-Middle East Regional Microcredit Summit.

Nairobi,April 2010

CONTENTS

1. Local partner selection

2. Zones identification

2. Community mobilization

3.Groups training

4. Replicators selection

5. Coordinators' support

6. Tools.

Local Partner Selection• Very critical :

– to reduce costs and also help in effective implementation in very short period of time

– because some villager in Mali have been cheated by dubious organizations

• Criteria for selection: – the local organisation – provides effective services, well regarded by

peers and donors, audited financial statements– legal certification in the country – experience in MFI operation is not required to launch a Saving for

Change program.• Field assessment :

– field visit and meeting with the villagers to assess the NGO knowledge for the area, its relationship with villagers and its credibility.

– Test villagers opinion about the program.

Zone identification• The area of one saving for Change project

– At least 200 villages for a team of 10 field agents (called animators) and 1 coordinator for 3 years.

– Each animator is responsible from 20 to 30 villages based on geographical proximity .

• Contact with local authorities– Visit/meeting with mayors introduce the program and confirm

the list of the commune villages, the population and their location.

- Sometimes it is necessary for the local government to introduce the animators in the village but it depends on how well the NGO is known in the community.

• Mapping of the area by the animators to know the actual location of villages

Community Mobilization• Step 1: Meet with the chiefs of the village and

the religions/traditional authorities to introduce the program

• Step 2 Meeting with the whole community (leaders, the representatives of women, youths)– An explanation on the program – Who is to be included, how long intervention will last. – Benefits that the community can derive by participating in

the program.

Community Mobilization• Step 3: Meet with chiefs of the households

and the leaders

– Have their support in facilitating their wives participation to the group weekly meeting

– Clarify the replication strategy for group creation,

Community Mobilization• Step 4: Meeting with all women in the village.

– Explain/Promote the program to all women in the village– Explain our strategy– Measure the level of agreement for the program

NB: The main thing to clarify during all these meetings is that we are not going to provide money to the group either by way of a grant or a matching fund. All the funds of the groups are saved by the group and all the loans given by the group come from this savings.

Group training

The training is based on the “Group creation Guide”.This Guide includes 2 parts:

Part One

Meeting 1 : The promotion and Savings Group Registration, • Objective• Compare current savings practices with a Savings Group.• Identify the importance of saving in a group.• Decide whether they want to join a Savings Group.

Meeting 2 : Savings Group Registration • Objective• Register their name to be part of a Savings Group.• Review the phases of Savings Group development and schedule of visits by

the animator.• Establish a schedule for Savings Group Training

Group training

• Part two : Training Meetings

• Meeting 1 : Savings Group Organization

Objective– Correct the list of members, if necessary.– Reflect on the benefits of membership in a Savings

Group.– Discuss member responsibilities.

Group training

Group training

• Meeting 2: Management Committee Election

Objective– Identify the qualities of a good Management

Committee and elect qualified members to those positions.

– Plan how to get a cashbox, lock and key.

Group training

• Meeting 3:. Savings Group Name, Goals and Size

Objective– Decide on a name for their Savings Group.– Decide the financial and social goals for their

Savings Group.– Discuss what a good group size is.

Group training

• Meeting 4: Attendance, Savings Amount and Fines

Objective– Decide the savings amount.– Decide on fines for not attending or saving.

Group training

• Meeting 5: Member/Helper

Objective– Meeting Agenda– Review the responsibilities of the Helper and

the Member.– Discuss the steps of a meeting.– Begin saving.

Group training

• Meeting 5: Fund Utilization and Lending Policies

Objective– Examine the portion of their group fund to lend

out.– Decide on size the loan period.

Group training

• 7. Lending Policies

• Objective• Decide the interest rate for loans from the

group fund.• Decide the amount of fines for late interest

or loan payments.

Group training

• Meeting 8: Fund Distribution and Lending

Objective– Decide the frequency for group fund

distribution.– Begun lending

Replicators selection

Replicators selection

• How to do it– Observe all group members – Identify those who attend more meetings and seem to

understand the activities of groups and the learning Conversations.

– Choose them as replicators

• Criteria– Person who can express easily her ideas in meetings.– Have time– Be motivated.

• Training and tools– 3 days training outside their village,– Receive pictorial manual

Replicators selection

• The process of creating groups by the facilitator and agent replicator is as shown in the table below: ..\Groups creation.doc

Process of creating groups by animators and replicator

Group assessment

Group assessment

• After 8 sessions to train the group and 7 malaria training sessions.

• Tool used: Group assessment tools.doc

Group assessment

• A group of 15 to 25 like-minded women decide to form a Savings Group to achieve their goals.

• The animator guides the members to make decisions about their Management Committee, how much to save and how much interest to charge.

• The animator trains members to make loans with their savings and pay back loans with interest.

• The animator teaches members about health, business and money management.

• The animator identifies, trains and coaches 2 members to become replicators and form new groups.

• During phase 1, the animator goes to the Savings Group’s weekly meetings.

•PHASE 1: Training (Months 1 to 6)

Group assessment

• During phase 2, the animator monitors the Savings Group as the members continue to save and lend with interest.

• The animator observes the meeting activities and answers any questions.

• The animator continues to teach members about health, business and money management.

• The animator continues to coach replicators to form new groups.

• At the end of phase 2, the members distribute the group fund among themselves.

• During phase 2, the animator goes to Savings Group meetings every 2 weeks or once a month.

•PHASE 2: Monitoring (Months 7 to 12)

Group assessment

• After completing phase 2, the animator visits periodically to see how the Savings group is working and to offer additional training.

• The animator continues to teach members about health, business and money management.

• The animator supports replicators to form new groups.

• After completing phase 2, the animator goes to Savings Group meetings every 3 months.

•PHASE 2: Ongoing (after completing phase 2)

Coordinator’s support

Coordinator’s support• Supervise the animators • Provide them advices and • Make an operational plan for the organisation with

Objectives, indicators, • Help animators to make their individual monthly

work plan for the• Evaluate the progress and the performance of each

animator. • Give feedback to animators while (s) he is

facilitating the group training• Using the tool : Checklist for Animation Style.doc• Fill the MIS for the monitoring and assessment.

• Why?– Because of the low rate of literacy of our target,– To involve all the groups members in the

activities of the groups.

Steps of meeting in Oral keeping system

Steps of meeting in Oral keeping system

• Check attendance– The President calls the meeting to order.– The President announces members’ names,

one by one, from left to right in the order in

which they are sitting to take attendance.– Members say “Present” when their names

are announced.– If a member is not present, the President

asks the Helper to remember her Member’s

fine for the next meeting.

• Recite rules– The President asks the members to recite

the rules of the group.– Members recite the rules of the group.

• Participate in a learning session– The animator or replicator facilitates a

learning session with the group.– Members participate in a learning session.

Steps of meeting in Oral keeping system

• Open the cashbox• Hand over key and cashbox

– The Cashbox Holder hands over the

cashbox to the Cashier.– The Key Holder hands over the key to

the Cashier.

Steps of meeting in Oral keeping system

• Members call out amount in cashbox– The President asks all the members to

announce the amount they remember as

the final amount from the previous

meeting.

(Note: The beginning amount

in the cashbox should equal the final

amount from the previous meeting.)

Steps of meeting in Oral keeping system

• Treasurer unlocks and opens cashbox• The Cashier unlocks and opens the

cashbox.

Step of meeting in Oral keeping system

Treasurer ashier counts and announces amount inCashbox• Treasurer counts the money in thecashbox and announces the amount tothe members.If the amount equals the amount fromthe previous meeting, the meeting goesas planned.

• If the amounts are not the same, then theTreasurer does a recount to see if therewas an error in counting.• The meeting continues only when theamount of money in the cashbox is thesame as what members remember as thefinal amount from the previous meeting.• If the 2 amounts do not match, then thegroup needs to discuss and decide theaction to take.

Steps of meeting in Oral keeping system

Collect fines and missed paymentsCall out and pay fines and payments• The President asks all Helpersremembering fines from previousmeetings to raise their hands. • The President announces the Helpers’names, one by one, from left to right inthe order in which they are sitting andasks them to announce fines and missedpayments owed.• The Helper announces her Member’sname and the fine owed.The Member comes forward andannounces to the group: “I am paying afine of _______ (amount)” and pays thefine and missed payment to the Cashier

Steps of meeting in Oral keeping system

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