Savings Groups and Smallholder Agriculture: learning...
Transcript of Savings Groups and Smallholder Agriculture: learning...
Savings Groups and Smallholder Agriculture: learning from the ground in South Africa
Anton Krone
14th August 2013
Content
Savings Groups in South Africa: SaveAct Savings & Credit Groups (SCGs)
Use of Financial Services: Changes over time
Trends and features of South African Savings Groups
Enabling institutions that support agro-enterprise
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
SaveAct Savings & Credit Groups (SCGs)
South African NGO founded in 2005 in KwaZulu-Natal
The savings model was piloted to allow for adaptations based on local conditions
Currently spread across several rural and peri-urban areas in KZN, EC and FS
It now reaches about 25 000 members in 1 100 savings & groups (SCGs).
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
There are roughly 1,100 SCGs and 24,100 individuals in the Eastern Cape and KwaZulu-Natal who make use of the SaveAct model to save and lend
4Source: SaveAct Annual Report & MIS data, 2012
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SaveAct members Total money shared out in 2012
…70% of capital used for loans…
consumption & investment
…more than 90% of SCG
members are women.
Avg group size: 22. Very high
uptake & link with social
grants
SaveAct Stats
8/16/13
$7.5 million
1. Saving/ Lending
2. Saving/ Lending
3. Saving/ Lending
4. Saving/ Lending
5. Saving/ Lending
6. Saving/ Lending
7.Saving/ Lending
8. Saving/Lending
9. Saving/ Lending
10. Saving
11. Saving
12. Payout
Towards more sustainable livelihoods through financial services for the poor
The model follows a 12-month rolling cycle which allows members achieve more sustainable livelihoods through these SCGs
5Source: SaveAct, 2013 & Genesis Analytics, 2013
Start (Month 1)End (Month 12)
The 12-month operating cycle
Savings as the glue
that stimulates
social capital
Platform for efficient
and effective support
strategies
Economic literacy
Improved coping
strategies
Consumption
smoothing
Improved capacity to take risks
Stimulates formation
of enterprises
Incubated in SCGs
Fed by savings
and credit, share outs,
and training
Improved capacity for
self-reliance
Savings and credit
Financial education
& life skills
training
Enterprise develop-
ment
Grow Investment: escaping debt through savings
Bergville (n=129) Matatiele (n=67)05
101520253035
Average Number of Shares Bought in 2011, by Duration of SCG Membership
1 year (or less) 2 years
3 years 4 years
“[I] was encouraged by what I have done in 2010, therefore I bought more shares in 2011.” (59 year old female, Matatiele)
Source: Delany and Storchi for FinMark Trust, 2012
Bank Mashonisa Stokvel SCG0
1
2
3
4
5
Trend in financial services use (Bergville)
2007 2011
Bank Stokvel Post Office Home0
1
2
3
4
5
Trend in financial services use (Matatiele)
2007 2011
Returns from saving in Savings Groups
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
Money is borrowed and repaid with interest
99% repayment rate30-40% annual return
Savings Groups Enabling Investment
Non-investment; 29%
Household; 33%
Enterprise; 13%
Agriculture; 15%
Education; 9%
Use of loans (Bergville)
Non-investment; 32%
Household; 36%
Enterprise; 5%
Agriculture; 6%
Education; 21%
Use of loans (Matatiele)
Source: Delany and Storchi for FinMark Trust, 2012
1. Savings Groups
2. Clustering the economically active
across SCGs for commodity ranking
3. Commodity Interest Groups (CIGs) formed
4. Isiqalo (enterprise) training
5. CIGs mentored & Participatory Value
Chain Analysis (PVC) conducted
6. Business plans developed (factoring in share-outs/ loan capital
& collective opportunity, eg bulk
buying)
7. Business plans implemented
8. Business plans tracked with
mentorship across the value chain
Flow of agro-enterprise support activities to SCG members
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
Commodity Interest
Group
SCG
SCG
SCG
SCG
SCG
SCG
Leveraging SCGs towards Agricultural Development Informed by Ranking and
Participatory Value Chain Analysis
Single commodity focus Collective learning and action,
such as bulk-buying Training and mentorship can
be tailored and enabled Enables agro-processing Aggregation of production to
achieve scale and penetrate new markets
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
Build agency and social capital
Collective activity:
Bulk buying of fertiliser
Bulk buying of seeds (commodity interest groups)
Informal collective activitieso Growing vegetables collectively
o Buying food and household assets
o Helping each other with building houses (Bergville) or burial services (Matatiele)
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
“I gained that if we all come together as the [SCGs do], we can go a long way. ” (43 year old female, Bergville)
Enterprise Development Example: Commodity Interest Groups & Potatoes
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
Enterprise Development Example: Commodity Interest Groups & Potatoes
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
Enterprise Development Example: Commodity Interest Groups & Potatoes
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
A Path Towards More Sustainable Livelihoods
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
Thank you
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
2. Upward spiral: virtuous circle of savings and enterprise activities
Financial Services & Sustainable Livelihoods for the Poor – Yakha Impilo engcono ngokulondoloza imali!
• Grants• Remittances• Enterprise• Salary/wages
“Members would borrow money to improve their businesses and they know that they can borrow money from the group if anything in their business is lacking…it is a two-way process because [when] I have sold things, I take the profit and save it to the saving scheme”. (Community-based promoter, Bergville)
Virtuous circle of savings and enterprise development