Collective Intelligence, Going Viral and Savings Groups

Collective Intelligence, Going Viral and Savings Groups

Last Wednesday I got to lead a webinar for SMDP entitled “What’s Next for Savings Groups” for SMDP – the big question I was asking about was, Why haven’t savings groups spread faster by themselves?  I proposed that there were three things that were keeping the Savings Group idea from spreading faster: First, the complexity of share-out, which many groups fail to learn to do, requiring external assistance seemingly forever; second, the cost of kits (boxes and passbooks and all that); and third, the trainer model, which is inherently top-down, and which makes growth dependent on the ability of INGOs to train and certify more trainers. I proposed some solutions, or at least partial solutions, to each of these constraints.


We had a great turnout and were honored by the presence of many practitioners, people who know what they are talking about. I asked some multiple choice questions and the participants also had a chance to write their own comments. I promised to put some of the noteworthy comments on Savings Revolution, and here they are. 


I asked if people thought that savings groups were part of the industrial economy, or part of the information economy. I reminded participants of what this means:  “The Industrial economy was built on scarcity and an either/or logic. For instance, if I give you my laptop, then you have it, but I don’t. It’s either you or me. 

The information economy on the other hand has a both/and logic, because information can multiply infinitely - if I send you the words to my new song, then you have them, and I still have them too. The nice thing about the information economy is that ideas can go viral, that is, spread unpredictably very far and very fast. Remember Gangman Style?


Most of what we do with Savings Groups is give people new information. We train them, and they take it from there, right? So, shouldn’t Savings Groups be in the information economy? And if so, why haven’t they gone viral?”


Most people – 52% - decided that SGs were partly in the information, partly in the industrial, economy. I think that it’s an important goal to help move SGs into the information economy. Otherwise, they will always stay small (or at least, not reach as many people as they could.) In setting up that question, I had given the example of M-Pesa, a technology that had gone viral, I said, because it was heavily advertised. Mwema  Gichinga from World Relief, Kenya, corrected me by reminding us that MPESA is mainly popular due to its fnctionality and practicality, not just the advertising, and I completely agree.


We moved on to some of the brakes that might keep SGs from expanding faster, starting with the complexity of share out. I said that for groups that cannot compute proportional share-out themselves, flat share out (in which every member gets her or his savings back, plus an equal share of earnings), was widely practiced already, easy enough for many groups to do by themselves, and appreciated by some groups (though certainly not all), because it is friendly to poorer members. 


I asked participants how important they thought proportional share out is? The largest group, at 39%, thought that it was “desirable but not essential”. But almost as many thought that “proportional share-out is essential”.  27% opted for, “I don’t care. Groups can choose whatever they like”. Will Kendall of Hope International amplified his vote pointing out that if a group has a social mission, as well as an economic one, they might be fine with flat distribution. Carrie Keju of FHI 360 fine-tuned her answer – it’s not that she doesn’t care what groups do. She does care, and wants them to choose what’s best for them.  Carol Davis of Outreach Uganda says, “The groups I work with in Uganda have varying levels of savings and want to be compensated for the amount they have invested.  They are serious about this!” Christine Baingana from Hope International says something similar: “The groups we work with, even with illiterate members, they choose the way they wish to save and wish to share according to their savings. They understand this!” And Alfred Hamadziripi, with World Vision, drew on his long experience to remind us that groups did flat savings for year, before the promoters started introducing proportionality. 


I then proposed that the high cost of kits (boxes, passbooks and so on) and the free distribution of kits constituted a second way we kept groups from going viral. I asked participants whether they though Facilitating Agencies should distribute kits for free. 66% of those answering came down in the middle, saying that maybe agencies needed to subsidize kits at first, but then move to free distribution. 26% were hard-liners and said that SGs should pay for their kits from the first. And 9% were softies and opted for, “Give kits to SGs because members are too poor [to pay for them]”. 


Again, there were plenty of good comments: Geralyn Sheehan of Opportunity INternatinoal in Granada hoped that NGOs could lend the cost of the kits to the group, to be paid back; in fact, some NGOs do that already, and it seems like a very sensible solution.  Jennifer Gurecki of Zawadisha wrote that, “There has been significant data generated from the J-PAL that the poor will not use products, despite their benefit, if they have to pay.” That’s surprising a bit – I would have thought the opposite. Courtney O’Connell from World Relief wrote that, “we ask our Field Officers to procure all the materials in their region which means that everything could still be found locally if/when the project ends.” She says, “I would love for all our groups to pay for the entire price of kits… in the DRC, our kits cost over $90!  To us, it’s a bit high to ask the group to pay fully; they pay about 50%.” Courtney told me later that the expensive kits are in Goma, where everything costs a fortune, and WR is working hard to find less expensive suppliers. Will Kendall shared something that I’d heard before in other contexts: “It’s challenging for our partner in Mali to promote groups in communities where a major NGO has distributed kits freely and we didn’t offer that to our groups.” And Carrie Keju had some very practical advice: “Strong boxes do not typically need to be as strong as practitioners often make them. This is a cost that can easily be picked up by the groups, with them deciding the security (and contingent cost) of the box.”


Aaron Stroud-Romero, with Peace Corps in Uganda, said, “Subsidizing kits allows people who are skeptical to jump in rather than paying a large up front cost.” And he asks, “Have you seen different ideas for groups to maintain security of records and money?”  He points out that the purpose of boxes is not only to maintain security against external sources but to keep money safe from mismanagement by group members themselves. And I agree: a box can never keep someone from tampering or stealing the contents. All it can do is make it crystal clear that it has been opened, if that happens.


Finally, Mary McVay of Enterprise Development Kiosk raises a question I should have addressed in the webinar: “I am curious about commercial models in which private “agents” take over the role of kit distributions/sales and training, setting up savings groups - once NGOs have jump-started the market?” Yes indeed. CARE Kenya, for one, has franchised out group training, and even supervision of the people who train groups. They also worked with local printers to get them excited about the size of the market for passbooks, and the printers responded, printing and distributing standard books which are available in many duka’s around Kenya. A lot of this worked well and produced some of the lowest cost per member ever recorded. I think CARE would agree that the system needs some tweaking to assure that independent trainers don’t cut corners in group training, but it’s a promising initiative. 


Along that line, of alternative delivery systems, I then asked, a bit more provocatively, if we might be able to move beyond the trainer model, either replacing trainers or at least supplementing them with smart phones (see this post) or, redefining the job description of people we sent to the field. I gave the example of AKRSP in Pakistan which will be sending out savings group “Activists”, whose first job is to make sure that communities understand their role in making savings groups available to everyone, indefinitely. Once the community understands that, the activist can begin to form groups, and select and mentor resource people from among them. Of course, Saving for Change and CRS both have made great progress with somewhat similar models and we all have a lot to learn from them.


Alfred Hamadziripi said to this subject, “Yes groups have been formed without facilitators but often the learning curve is very long for the initial period (which retards growth) and the quality (if that matters) takes long as well. Where a well-trained trainer requires 5 days of intense training and they will be ready to roll in the second week the natural growth takes much longer. I believe if we can downgrade and have a critical mass of community based trainers (including partnering with schools to have children as facilitators as part of the extra curricular) we can be much smarter. Whether digital or warm body training is a necessity.” He went on to question whether the training model in which one savings group per session is trained is effective and efficient. He said that back in the late 90s up to three 3 groups could be generated from a one-week training, and I certainly believe that when there is a good trainer involved. 


Steve from World Renew commented, “more frequent visits are important over the long run when there is a longer-term program that integrates different sectors…and when there is continuous learning— when it’s not just about savings.” True, totally agree.


We also talked about the possibilities of using videos to train groups. I regularly learn how to do everything from cooking to home repairs on YouTube. Why can’t a few short videos in local languages teach people how to run a savings group? Having videos would assure that everyone gets the same content, the same messages, and they can listen as many times as they want. There was some interest expressed on this. Kathleen Stack of Freedom from Hunger mentioned that they are using local language videos to train trainers – I’m just proposing to take that one step further and use them to train groups directly  I don’t think videos will put human being out of business, though; they should just make the work of trainers easier and faster. 



We ended with a discussion of the e-Recording app that FSD Kenya has developed. We’re written about this a couple of times on Savings Revolution. It’s something everyone is interested in, and I think that 2014 will be the year of smart phone savings groups. 


These aren’t all of the comments, and a couple of people said they might write things up and send them in later, which would be great. But I think I will stop here, and thank everyone who came on the webinar, and thanks for all the good comments!


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Reader Comments (2)

Thanks for your summary of the great webinar from last week. We feel fortunate to be a part of the Savings Group community - a community in which the tough questions can be asked and considered so that collectively we may grow and improve.

I wanted to let you know that here at Philanthropiece we are just about to launch an initiative to create a series of training videos for savings group members themselves (as opposed to videos to train the trainers). We are scheduled to film the first installment in early December, with a release late January 2014. The first video will focus on forming a savings group, with a specific emphasis on the roles of the committee and choosing effective committee members. In early 2014 we'll film our second installment, which will focus on the them of "good versus risky loans" within savings groups.

We are intrigued with the idea of having baseline scripts that our sector can utilize to create these training videos. Ours will have a heavy cultural emphasis on Mexico/Latin America, but we intend to have a script/outline of the video that we can open source for others to build upon. Of course, our videos will also be open sourced so organizations will be able to use them, then adapt to their culture accordingly with follow up conversation.

If anyone has any language that they have already used for training videos, we would be very grateful to review it. As well, if there are specific themes for training videos for savings group members that your organization is interested in, please let us know; this can help us with our priorities for which themes to focus on in 2013/2014.

Thanks again for your commitment to this sector, Paul, and we look forward to continuing to learn and grow together!

Warm regards,
Katie Doyle Myers
Director of Programs, Philanthropiece Foundation

Mon, October 14, 2013 | Katie Doyle Myers

Dear Paul,

Thanks so much for hosting the webinar and for the good summary.

Just a clarification. Freedom from Hunger has developed video animations for Formation of Savings Groups:This is a training tool intended for use by Community Agents to form and support the operations of Savings Groups. It consists of a series of ten video animations (about 5 minutes long), each representing a different Savings Group meeting, aimed at ensuring proper organization, autonomy and transparency in the groups. The video animations were created using the proven content from existing Savings Groups formation Guides. The audio of the animations is translated in local languages to prompt the user, particularly the Savings Group Community Agents, who are primarily illiterate. We are testing these in Benin to assess both impacts and potential for reducing costs of group training.

All the best!

Kathleen Stack
Vice President, Programs
Freedom from Hunger

Mon, October 14, 2013 | Kathleen Stack

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