I've decided to make an F.A.Q.s post to explain, in short, what exactly I am doing down here, and how it can help. This is an edited version of a conversation my mom and I had on Skype and she talked through a bunch of my frustrations and fears with me. The result? I was encouraged, ready to work harder, and reminded of practical ways to minister here. And another result is this blog. So, thanks Momma.
Q1. 'Savings group' is a commonly used term, but how do you plan on teaching them to save? What about something like an envelope system for creating a budget for different categories?
A1. First, I don't want to be presumptuous and assume that they don't save because they don't know how, or even that they don't already have a way to save. One of the biggest problems I've seen here so far is the concern of safety when saving money. It's not safe to have large amounts of money with you or even to leave in your house. Carcova is a very dangerous place, full of crime. Thus, saving up a large amount of money is a risk that it seems like many can't afford to take.
Second, that is a great idea, but again it's too high of a risk. Some of the women and I were talking the other day on this subject. We all thought that it'd be good to make a list of prioritized items in a budget before beginning the cycle of saving. Then, when a woman takes her turn receiving the money, she can only use the money for the items on the list. For example, if clothes are not on the list, she isn't allowed to go on a shopping spree with her money. And what is the accountability for this? The other women in the group are. They will ask her how she will use her money, the day she receives it and the next group meeting. This idea needs a little more work, but I really like the sound of it. One of the women of the church in Carcova that I'm working with right now suggested something like this.
Q2. Do they have good banking systems to be able to save on their own, securely?
A2. I'm not exactly sure, but inflation is at about 20% and the interest rate is __%. When walking around the main street of Suarez, I've noticed a massively long line at the only bank I've seen close to here. So, maybe people would prefer to keep money with them because it's too much of a hassle to retrieve money from the bank. This is something I really need to research more. One family I know has a savings account, but doesn't use it. They said they don't have enough money to put some in there. But, again, I wonder if it's just too expensive or too much trouble to use a savings account.
Q3. You've mentioned trust before, and it's apparent that a great deal of trust is needed to start a group that depends on others to save money. Will it be hard to establish trust among the women?
A3. That's a fantastic question that I don't yet know the complete answer to. I hope not, because I don't have that much time here. My only connections within the villa are with believers (except a few people I've met through the Remisería). The plan is to start a savings group among the women of a particular church while I'm here to provide an example of how to start more groups like this and to make sure that it works. The fellowship of believers is like an extension of your family from what I've seen. But I need to gather more data of interactions and times where the amount of trust between the women is exemplified to know for sure. And for this, I think with a smaller group of women, it will be much easier to build and solidify trust.
Q4. Where will the small groups of women keep their pooled money?
A4. Well they won't keep pooled money. The beauty of a RoSCA (Rotating Savings and Credit Association) is that savings occurs by the way of giving loans to other women along the way. Rutherford calls this, "Saving up," "Saving down," and "Saving through."
Let me back up to explain this completely. For example, 5 women are in the group. They've decided to bring $100 pesos to a meeting every 2 weeks. So, each meeting, each woman brings $100 pesos and pools the money together. They have $500 pesos combined. The first woman that takes the money will be "saving down." It's like she took a loan from the other women and will pay them back in the following 4 meetings. The second through fourth women are all "saving through." They contribute a little to begin with, take their loan, and continue to contribute to the group until they've paid back their loan. The fifth woman is "saving up." This is just what it sounds like. It's very similar to saving up for something on your own, but it allows you to save in a safer way (you're not saving large amounts of cash in your home) and it is a good way to be sure to save your money and not use it for something else. So, really, the fifth women is not given a loan, her money is returned to her in the final savings meeting.
Q5. So they have to participate in every meeting?
A5. Bingo.
Q6. What happens if they don't or can't? Is the key to make it affordable for everyone?
A6. Again, you've nailed it on the head. It is very important that the women decide how much they will each contribute (an equal amount for all) and how often they will meet. And again, because of these issues, it's very important to have trust among the members of the group that everyone will contribute their share each time. Or, if they barter contributions, they will be repaid. And furthermore, the women need to be more or less from the same economic class, with a relatively equal amount of monthly income and government pensions/assistance.
Q7. Will a part of the program be teaching them things they can do together to earn money?
A7. I think in the long run, that is a foreseeable goal. That's one of the tools in microfinance. But, for my short time here, I think it's best to stick with a smaller, more attainable goal.
Q8. Do they all make lists at the beginning of their needs?
A8. Yes, that's one of the things that I want to do with them. I'm working on an exercise/questionnaire to help create their list. But first I want to create an inventory of the assets and income of their household and then follow with a needs list for each woman. But to be able to do that, I need to build trust with each of them as individuals.
**Other comments: I think that they would have to agree up front what is/are viable uses of the money that they are saving.
**YES! And [the group] needs to be small. otherwise if there's 11 women, it could be almost 3 months at the least before you can access all the money you've been putting into the group.
That's all for now. But please email me of you have a question or comment to add, I'd love to hear from you! clairevictorias@gmail.com
Thanks for all of your continued prayers and encouragement.
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