What Are Savings Groups?
The Savings Groups facilitated by Temple Garden Foundation (TGF) are community-led financial initiatives aimed at empowering our target communities. These groups serve as a sustainable and inclusive way for rural households to save, access affordable loans, and strengthen peer accountability.
Each Savings Group is made up of trusted members from local villages. TGF provides training on the importance of saving, bookkeeping, and financial literacy to ensure smooth operation. The initiative enhances local economic stability by enabling households to save collectively and borrow funds directly from their groups.
Savings Groups operate entirely under the ownership and management of the communities, while TGF acts solely as a facilitator and support entity.
How TGF’s Savings Groups Function
- Group Formation and Training:
- TGF establishes Savings Groups with members chosen for their trustworthiness in the village. Comprehensive training is provided on saving, loan policies, bookkeeping, and financial management.
- Monthly Meetings:
- Groups hold monthly meetings to collect savings, approve loans, and discuss their progress. Each group operates with its own independent policies for loan approvals based on mutual agreement among members.
- Loans Issued with Low Interest Rates:
- Members: Loans are provided with a 2% monthly interest rate.
- Non-Members: Non-members can borrow at a 3% monthly interest rate.
These low rates encourage productive investments among community members, fostering business growth, improved housing, education, and health.
Annual Savings and Loan Cycle
Each group follows an 11 or 12-month financial cycle, starting in January and ending in December. By the end of the year:
- All loans must be repaid during closing cycle. (Any unpaid loans are given a grace period until Q1 2025.)
- Members can withdraw their savings, reinvest in the group, or request new loans for the following year.
Impact of Savings Groups on Beneficiaries
Savings Groups are not standalone efforts but are part of TGF’s interconnected Income Generation Program. This broader program also includes complementary activities such as agriculture training, entrepreneurial support, and improved farming practices.
Together, these initiatives have helped:
- Increase household incomes by 300% since 2012 (based on prior research).
- Ensure more savings within the community, allowing funds to flow back into the villages.
Key Achievements of Savings Groups in 2024:
- Number of Groups: 39 across 39 villages, serving 5 communes.
- Total Members: 1,739 (with 1,689 female members making up approximately 97% of the total).
- Active Participants in Savings/Loans: 1,255 (out of which 1,190 loans were taken by women).
- Total Loan Amount Circulated in 2024: $ 629,330 (actively supporting the community’s financial needs and growth).
- Average Loan Size Per Household: $ 498.
- Lowest Loan Taken: $ 25
- Highest Loan Taken: $ 6,500
- Unpaid Loan Amount: $ 6,673 (to be repaid by Q1 2025).
- People Not Paying: 21 (around 1% of total members).
Supporting Economic Growth: Why These Groups Work
TGF’s Savings Groups make a significant difference in the communities because they:
Provide Access to Affordable Finance:
By lowering financial barriers for smallholder farmers and entrepreneurs and making funds available at affordable rates. Loans in 2024 are primarily used for:
- Agriculture (69% of total loans): Enabling farmers to expand and improve operations with a total of $ 435,398 loaned to 875 borrowers (out of which 831 were women).
- Religion, Weddings, and Ceremonies (10%): Supporting families for important life events, with a total of $ 64,686 loaned.
- Home Renovation Activities (10%): Empowering families to improve their living standards, with $ 62,781 in loans issued.
- Health Needs (6%): Addressing urgent medical needs with loans totaling $ 36,461.
- Education Expenses (3%): Supporting school and educational needs, with $ 17,471.
- Other Purposes (2%): Including transportation and business-related needs, with $ 12,533 borrowed.
Stimulate the Local Economy:
By circulating money within the local community, these groups boost economic activity and allow community members to invest in businesses, create jobs, improve food security, and increase their productivity.
Foster Community Leadership:
Leadership roles within these groups encourage capacity building and confidence among participants, many of whom are women.
Integrating Digital Tools with Savings Groups
In 2023, TGF started to introduce digital bookkeeping tools to enhance efficiency and transparency within Savings Groups.
The TGF Savings Group App: TGF developed a custom mobile app to track monthly savings and loan transactions. Group leaders were provided with tablets and trained in several sessions. Many groups now use this app alongside traditional record-keeping to ensure accuracy and faster data analysis.
Training and Integration: Leaders were trained in how to use the TGS SG App, as well as other Apps like Telegram and Messenger for improved group communication.
2024 Highlights:
- Digital Bookkeeping Training: 24 Savings Groups participated in intensive training sessions on digital bookkeeping using a reviewed and updated new Savings Group App. Tablets were distributed to each participating group, facilitating the transition from traditional methods to digital record-keeping. The training emphasized the practical application of the app, guiding members on how to digitally record monthly savings and loan transactions.
- Strengthened Governance: Support was provided to strengthen governance structures by assisting groups in developing bylaws recognized by local authorities.
- Simplifying Bookkeeping: The introduction to our own Savings Group App streamlines data entry and management. This digital transformation not only saves time for group members and TGF staff but also enhances accuracy and transparency.
By utilizing digital tools and providing comprehensive training, TGF’s Savings Group program is fostering financial literacy, improving record-keeping efficiency, and strengthening the overall sustainability of community-managed savings groups.
