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.