How can savings .60 cents per week work to uplift and empower a family out of poverty?
Well, we’ll tell you…
This group in rural, Western Kenya started with an average income of $26 dollars per month (less than a dollar per day). They faced extreme challenges. For instance, how could one of these mothers send their children to school for $200 dollars per year (per each child) at the secondary level with income that low? What if they or one of their family members was struck down by malaria–would they have enough disposable money to treat it? What about when the rains don’t come and the harvest for subsistence agriculture on their small plot of land isn’t enough–will their be enough food to feed a family of eight?
There is a solution. The solution comes with dedication and time, but it comes. Most importantly, it comes from their own efforts and resources. It comes without perpetual handouts and comes with an end goal in mind. It comes in a non-paternalistic fashion, allowing the group of beneficiaries to define their goals and their methods for growth. The solution is micro-savings.
Here’s how it works:
1.) Each woman from this group saves 50 shillings per week (about .60 cents)–they work extremely hard finding small ways to bring in extra money to save. Saving 50 shillings is not always easy in an area where many people survive off of less than a dollar per day, but through discipline and dedication, they make it happen. The group structure helps provide support and accountability.
2.) After a period of 10 weeks, they have each saved 500 shillings.
3.) GOA, as an incentive, rewards each woman with 10% interest (or 50 shillings)–each now has 550 shillings. This is where GOA shows its partnership in locally-owned community projects. 10% is enough to offer a healthy incentive, but not too much that it takes away from local ownership. Additionally, there’s no risk. It’s not a loan, and there’s no way we’ll ever ask for a payback. The pressures of taking on burdensome debt on a near-zero income basis seem too taxing for many local families to fathom. This is micro-savings, this is bootstrapping at its finest.
4.) The 550 is then re-invested in local group and family projects that they decide and feel are appropriate given their objectives , talents and local resources. Currently, the Jinyeme Group is focusing on maize distribution. They put their collective savings together and buy large sacks of maize at wholesale and resell it in the local markets for relatively handsome profits. Again, they keep all the profit.
5.) The profit they make from maize goes into things like education for their children, extra money for seeds to enhance their agricultural efforts, rainy day funds for medical emergencies, poultry farming and animal husbandry (for improved nutrition and additional income-generating opportunities), etc. Slowly, buy surely, through the universal model of saving money, this group of empowered, dedicated women will bid poverty adieu. After 10 cycles (each cycle being 10 weeks), each member will graduate from this micro-savings program with adequate opportunities and resources to be self-reliant and sufficient.
In addition to what has been saved, in just 33 weeks of savings, each member of this group has reported to us that they have earned more income through this model than in the last three years of income generation combined. Consider that!
We need your support to keep this and other programs running. Please contribute to this program of empowerment here. Even $5/month (the cost of one Big Mac) will help!