Scaling Savings: Conditional Cash Transfers and Savings

Groups February 18, 2015

Jong-Hyon Shin Jeff Ashe

Background

Strengths Challenges

Savings Groups (SGs)

• Reach the poor, the young and the rural

• Increase in savings, investment and solidarity

• Program sustainability• Takes time for

meetings

Conditional Cash Transfers (CCTs)

• Alleviate immediate poverty• Break inter-generational

poverty (school attendance, nutrition and health)

• Dependency • No increase in

financial assets

Financial Inclusion (FI)

• Global priority of the public and private donors

• Larger loans long term savings

• Limited outreach to the poorest

Outreach of CCTs in Latin America

CountryPopulation (m

illion)

CCT

(million)%

Brazil 201 15 7.49

Mexico 123 6.5 5.28

Perú 29 3.2 10.90

Colombia 47 3 6.39

Ecuador 15 1.9 12.67

Chile 17 1.1 6.74

Bolivia 10 0.87 8.77

Rep.Dom. 10.28 0.85 8.23

Guatemala 15.1 0.76 5.06

El Salvador 6.2 0.12 2.02

Paraguay 6.3 0.09 1.44

TOTAL 479.88 33.49 6.98%

Pilot with Dominican Government

Objective Improve the income of PROSOLI families by forming savings groups and facilitating access and use of financial services.

Outreach 10 communities

Duration July 2014-February 2015

Target population

200 Group Supervisors, 5,000 PROSOLI families

Expected outcome

• 200 group supervisors trained• 200 SGs (5,000) formed • 2,500 Bank accounts opened

Structure of Dominican CCTs (PROSOLI)

Methodology and Result

• 3 trainings to 200 group supervisors on savings, lending & share-out

• Field trainings

• Monthly meeting with 20 representatives

• Savings group started to be formed in 3 months.

• 148 groups (2,450 members), 48 bank accounts opened in 4 months.

Trainings

Achievements

• 148 groups (2,450 members) in 4 months.

• Increasing interest in savings among groups

-Average savings: US$5-10 /person/month

-4 children’s groups ( 3 months-15 years)

-Main goals: Housing Improvement, Education & Business

• Incorporation to the Annual Operations Plan of PROSOLI and 2 SGs formed in HQ.

• Active bank involvement (ADOPEM,BHD)

Challenges

• Time constraint of group supervisors

• Negativity of some group supervisors (see the SGs as an extra burden)

• Lack of support from immediate superiors

• Transportation cost

• Poor performance of the SGs due to the lack of reinforcement on the methodology.

Lessons Learned

• Start small (A group can be formed with 8 members)

• Conduct area diagnostics and identify the most interested persons and work with them

• To have superiors involved throughout the process

• More emphasis on the training and reinforcement

Jong’s Findings

• SGs, complementary to the PROSOLI goals.

o Decent Housing

o Better income (Low interest rate)

o Payment to the school fee

o Solidarity (Weekly meeting)

• SGs, a path to the economic Independence for PROSOLI families

• PROSOLI has the structure and human resources for the scale up of SGs

• Low operating cost

• Follow up guaranteed

• Platform for the genuine financial inclusión

More of Jong’s Findings

• Enormous interest in savings among the PROSOLI Families.

• Group Supervisors have a good local knowledge and close

relationship with the PROSOLI families.

• Group supervisors are often exceptional leaders with positive

influence in their communities.

• Group supervisors like forming SGs and find it easy.

• “Family School” is an ideal place to identify good SGs.

Jeff’s Findings

• With disciplined savings and solidarity benefits increase by 25% ($100 per year) at no cost to government

• Weekly meetings increase solidarity, motivation, goal setting

• Investments in housing, business, education reflect PROSOLI objectives

Three year SG Scale Up Program

Implications

• Savings group expansion program by reassigning 3% of PROSOLI Staff

• Results need to be documented:

– Group survival

– Use of savings

– Meet CCT objectives

– Graduation

• PROSOLI CCT/SG model applied to other CCT programs

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