What are are savings groups?
Savings groups support people who don’t have access to financial services to save money and learn key financial skills.

They are a form of microfinance involving small groups of 15 to 25 members that have well-defined procedures, allowing members to make basic rules about saving and borrowing and operating in transparent and democratic ways. This leads to a secure system that encourages responsible use of the savings, borrowing and social insurance services offered by the group.

Savings groups are the first step to financial inclusion as they provide a mechanism to save money while building financial knowledge and skills. They can play a vital role in achieving one of the Global Goals’ ambitions to end poverty in all its forms by 2030

How does financial inclusion reduce poverty?
Youth savings groups allow young people to learn about finance in a low-risk fashion. As part of the process, young people learn to set savings goals, distinguish between good and bad options for borrowing and discover how to link with formal banks and microfinance institutions if they want to. Unemployment is tackled by allowing young people to invest in their education and health, as well as income-generating activities that may lead to self-employment.

Savings groups can work as effective vehicles of social and economic change. They can be used to deliver financial education, child-rights awareness, healthcare, agricultural and entrepreneurship training. They can also help communities sustain infrastructure such as water points or build resilience in planning for or recovering from emergencies. Saving groups are essentially simple platforms for collective learning and action.

Saving group projects can especially benefit women, who are worst affected by poverty. The groups offer a safe space to save and borrow, learn how to invest their money most productively, as well as providing a platform to strengthen social cohesion through mutual trust building and collective action.