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Over the weekend, the Washington Post ran a story about the growing attention being given to microsavings. Here at Five Talents, we were delighted to see the story because it affirms the work we've been doing for years. It also communicates a powerful truth: that learning to save can transform one's life – even in communities where women and men do not have access to traditional banks.
"There's a common, misguided, knee-jerk reaction that if you're poor, you have no assets to save," Dean Karlan, a Yale economist, told the Post. "People who are poor obviously save less, but they still save."
We've seen this for years in our Burundi program, which by June 30 will have helped more than 10,000 women and men join savings groups and build wealth where, previously, they had none. Other Five Talents programs – including ones in South Sudan, Myanmar and Bolivia – also feature the group-led savings model.
In the case of Five Talents, however, these savings "circles," as the Post calls them, are far more than glorified piggy banks. They are microcosms of self-government and hubs for compassionate community outreach.
I saw this first-hand during my recent trip to Burundi.
Each group has a constitution (a list of rules) that is created and agreed upon by the members themselves. The rules cover everything from the number of women and men who may participate in a single group, to conditions regarding savings deposits and loan disbursement. Group members also determine their own interest rates and penalty fees.
This self-determination does wonders for members' self-esteem, and it encourages discipline and order that members can then model in their individual homes.
Even more amazing, though, is what these groups are able to accomplish for others in their community. Most savings groups in Burundi create an emergency fund, which they will only tap when the group collectively identifies a needy individual in their community – often someone who is not even a part of their circle.
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Five Talents Executive Director Sonia Patterson took this photograph during her recent program visit to Burundi. She and our program director, Suzanne Schultz Middleton, were in the capital city of Bujumbura participating in a seminar evaluation hosted by one of our program partners, Mothers' Union.
Bujumbura is the main port of Burundi and is located alongside Lake Tanganyika, one of Africa's "Great Lakes." Goods that are shipped out of the port include coffee, cotton and tin ore.
The Mothers' Union Literacy and Development Program has been successfully training Burundians in literacy and numeracy since 2005. Five Talents partners with the Mothers' Union in order to provide business skills training as well as savings and credit group formation to the literacy program participants.
By the end of FY2013, 340 savings groups will have been started and it is anticipated that 10,000 people will benefit from this project.
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It is truly a blessing to be here in Burundi visiting a few of our savings groups, discussing the program and meeting the trainers and facilitators. While sitting in on savings group meetings, I have been deeply touched to witness how these groups care for their members.
One group shared how they had covered the school fees for a grandmother who took in orphans.
Another group talked about how they cultivate the plot of a member who is sick. They also explained how they had used the money they had saved in the group's "Emergency Fund" to pay for medicine.
When I heard their story, I was reminded of Jesus' words in Matthew 25: "For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, I needed clothes and you clothed me, I was sick and you looked after me."
Many of the group members also told stories about how their household income had increased. They now have a better roof over their head, or better clothes to wear. Beyond these benefits, the group thoughtfully used their collective "Emergency Fund" and demonstrated their love for each other.
In our savings groups, members make their decisions through thoughtful deliberations and consensus-building. They love and respect each other. One woman said, "I won't leave this group until I die".
For a country that has experienced so much conflict and strife, how incredible is it that at the community level, in the remote hills of Burundi, people are gathering to love, support and care for each other.
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Five Talents Program Director Suzanne Schultz Middleton is currently in Burundi visiting with savings group members and local staff from Mothers' Union, one of our partners in the country. Last week, she spent a day in the Diocese of Matana, a slice of which can be seen in the above photo, which was taken during an earlier trip.
So far, Suzanne has met with 35 savings groups representing more than 800 members. She plans to spend the next several days in the southern city of Nyanza Lac at a retreat with the Mothers' Union trainers who help to manage the savings groups and train members in basic business skills and financial literacy. Please keep Suzanne and the MU staff in your thoughts and prayers!
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We're living in an era of touch-screens, social media and quick reads. Nonprofit organizations like ours depend on pithy tweets, Facebook "Likes" and photo-sharing platforms like Instagram to reach new supporters and raise awareness and funding for our programs.
But technology – as great as it is – can seem so inadequate on days like yesterday, when we received word that a large market in Bujumbura, Burundi, had burnt down (Photo: GLM News).
The market in Burundi's capital city housed hundreds of businesses, some owned by women and men who were members of savings and credit associations organized by Mothers' Union, our partner in Burundi.
Micro-entrepreneurs work so hard to cobble together businesses that they can use to feed their family. To see so many livelihoods go up in smoke is just heartbreaking.
We tweeted about it yesterday. We're blogging about it now. Tomorrow, some supporters will be moved to donate. But there is a deep discouragement in the hearts of these micro-entrepreneurs that can only begin to be healed by something ancient – by praying to a caring, loving God.
We hope you'll take a moment to offer up a prayer for the women and men who have lost their livelihoods in Bujumbura, Burundi. Not just today, but for the rest of this week, and maybe even beyond, if God so moves you.
The truth is, we at Five Talents – including our partners oversees and the members of our savings and loan groups -- need your prayers more than we need donations, Facebook "Likes" and Twitter "Followers."
In prayer, there is a healing power that no amount of dollars or awareness can match.
For this reason, we have created a campaign page on PlusGrace, a new online platform where believers all over the world are gathering to pray for specific causes and projects. Our page focuses on our program in Indonesia, but we will be sure to post other prayer requests as well, like this story from Burundi.
We hope you will check back often and pray for the needs you see listed on our PlusGrace page, as well as the needs listed on the campaign pages of other organizations and individuals.
We trust God will provide courage, peace and new business opportunities to those who have lost their livelihoods in Bujumbura.
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We write often on this blog about "savings groups", but what are they and how does group participation "empower" a micro-entrepreneur?
Let's use, as an example, a group from our program in Burundi, where we partner with Mothers' Union. Pictured here is the "Gistinda" group.
Five Talents' group formation model helps to create a support network for women and men who are becoming financially literate, learning to manage their money and planning or growing a micro-enterprise.
The groups operate according to the following principles:
- Each group has a constitution (a list of rules) that is created and agreed upon by the members themselves. The rules cover everything from the number of women and men who may participate in a single group, to conditions regarding savings deposits and loan disbursement. Group members also determine their own interest rates and penalty fees. The process of drawing up their own constitution helps members to take ownership of their group.
- Every decision is made democratically, and all operations, such as depositing money into savings or disbursing loan capital, are conducted in front of the group. Such transparency helps to guard against distrust and corruption.
- Group members see themselves as a family. Before graduating to "savings groups," members have already become familiar with each other through the literacy program that they must complete as a prerequisite. This familiarity usually becomes "solidarity," meaning that group members become so close that they will often come alongside one another during difficult times. For example, if a group member is unable to cultivate a plot of land, all of the other group members will pitch in to complete the project. One group described their "solidarity" in this way: "What keeps us together is love. Money will finish, but love will remain."
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Perhaps you already have 5 books on your must-read list for 2013. Or maybe you have more like 50. Either way, we hope you'll read at least a couple of the following picks over the next 12 months. We're recommending titles that approach poverty from a variety of perspectives. Whether you are a development specialist or someone who simply loves a good story, we have you covered.
The Dragon's Gift
If you're interested in Africa and would like to learn more about the aid and investments that are flowing into the continent, then Deborah Brautigam's The Dragon's Gift is a must-read. The author has spent decades studying China's investment and aid packages to African governments. Besides offering a timely and ground-breaking analysis of China's activity on the continent, Brautigam also provides context so that we can understand how China's approach to aid and investment differs from that of the United States and other Western nations. For a great review of the book, click here.
Where China Meets India
If you'd like to learn more about one of the countries where Five Talents works, we recommend this book about Myanmar (Burma). Last year, the Burmese government made news by launching a series of reforms, including a loosening of media controls and an embrace of democratic elections. What was once one of the most closed societies in the world was suddenly opening its doors to the West and inviting investment to help spur development. Where China Meets India, by Thant Myint-U, is an engrossing travelogue that shows just how fast Myanmar is changing.
A Free Man
If you want to read a profile of an individual who is struggling to escape a world of poverty, look no further than Aman Sethi's A Free Man. The author, a correspondent for The Hindu, focuses his non-fiction narrative on the life of a homeless day-laborer in Delhi, India. The fast-paced story takes the reader into a world that few of us in the West have ever seen. Esther Duflo, co-author of Poor Economics (another great book that we have written about), calls Sethi's book "a beautiful work of journalism," adding: "What starts as classic ethnography becomes a gripping story, and ends as a homage to a lost friend."
Through the Eye of a Needle
If you enjoy history and would like to learn more about the early church and Christians' view of wealth and poverty, read Peter Brown's acclaimed Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 AD. Brown, a respected historian, excels at evoking the life of the ancients through colorful prose and through profound readings of saints like Ambrose, Augustine and Jerome. As Christianity Today puts it, Brown lets us "hear the heartbeat of late Roman and early Christian civilization."
When Helping Hurts
If you'd like to learn about how the Christian church has helped – and hurt – the cause of the impoverished around the world, then pick up Steve Corbett and Brian Fikkert's When Helping Hurts: How to Alleviate Poverty Without Hurting the Poor...and Yourself. The book was re-released in 2012 with a new foreword and two new chapters. Readers interested in learning more about the philosophy that informs Five Talents' approach to micro-enterprise development will find this book particularly helpful.
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Every person who participates in our program in Burundi, where we partner with Mothers' Union, learns how to read and write before joining a savings group. This foundation is crucial to helping women and men manage their money, build up savings, and, eventually, set up micro-enterprises that can generate enough income for food and clothing.
The Burundi program is one of Five Talents' fastest growing – it nearly doubled in size in FY 2012, adding over 4,100 new members.
One of these new members was the mother of a group organizer or "facilitator" named Rode (L). Their story is remarkable: Rode helped her mother (R) become literate and then watched her graduate to a savings group called "Terimbere Mukenyezi," which means "Women, Be Empowered for Your Development." Rode's mother is saving about 800 BIF per month ($0.62) thanks to a banana juice business, which she launched with the help of a loan that would have bought only a cup of coffee here in the US.
Thanks to this business, Rode's mother is now able to buy her own clothes, including the wrap she is pictured wearing here. For both mother and daughter, this is an accomplishment that they never even dreamed was possible.
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- Mothers’ Union Burundi (Literacy and Development Program), Bujumbura, Burundi
- Mothers’ Union UK
Program Type and Services:
- Christian Microfinance Institution: “Savings-Led” with Group Savings and Guarantee
The community-based Accumulated Savings and Credit Associations (ASCAs) in this program enable group members to mobilize their own savings and lend to each other.
- Budgeting and saving skills
- Business ideas, planning, marketing, price setting
Burundi is recovering from a civil war that devastated civil society structures, contributed to high illiteracy rates and poor health care, exacerbated gender disparity and plunged large numbers of the population into abject poverty. Thousands of people died and others were driven from their homes, leaving women and children in particular vulnerable to gender based violence or abduction. Burundi is currently one of poorest countries in the world, ranked 185 out of 187 countries on the UN’s Human Development Index (2011). The life expectancy at birth is just 50 years, and only 52.2% of females are able to read and write.
At the root of the country's problems are issues such as poverty and low levels of education among women; early marriage and pregnancy; and lack of access to land, credit and training. Some or all of these factors result in many women becoming vulnerable and further trapped in poverty. It is especially in more remote areas that women are marginalized and face fewer opportunities for training or for credit to support income generating activities.
The Mothers' Union Literacy and Development Program has been successfully training Burundians in literacy and numeracy since 2005. Five Talents is now partnering with the Mothers' Union in order to provide business skills training as well as savings and credit group formation to the literacy program participants. By the end of FY2013, 340 savings groups will have been started and it is anticipated that 10,000 people will be beneficiaries of this project. The target population for this project is the most vulnerable communities. At least 70% of participants will be women.
The goal of this project is to build the capacity of Mothers’ Union Burundi to be able to provide training and skills in the area of savings and credit group formation and small-business skills. We hope for women to gain literacy, manage their assets, take part in household decision-making, join a savings and credit group (ASCA), establish or expand their businesses, and become empowered to take a lead on development issues within their own communities.
We'd appreciate your continued prayers for this transformative program. Please help us expand our work in Burundi either by making a one-time donation or by signing up to "Walk with Us" as a recurring donor. A monthly gift of $10 will transform up to five lives.
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Updated December 2012