Savings promotion initiative
DR. Jose Rene Gayo has been an ardent advocate for grassroots people development. He shares his experience---and perspectives---drawn from his being involved in “promoting the savings habit and discipline”.
Dr, Gayo had known of the Piso at Puso Program, promoted by a group of ladies and pitched to housewives in shanty neighborhoods, which are often quite near plush, exclusive, gated urban villages. He narrates: “Each family participating in the program was supposed to save at least P1 a day. The members of the “savings association” (i.e. the small group formed from within the shanty neighborhood) would meet weekly to update each other on the status of their savings. During these meetings, they were also given a talk on values formation”.
The connection between “values formation” and the inculcation of the savings habit is thereby made very clear. Indeed, it may be difficult for any family to live by the “discipline of savings” without any values to anchor their future on. In any case, this was the general idea. Dr. Gayo continues: “Once their pooled savings have reached a certain amount, the group then would decide who will be the first loan beneficiary (of the savings that had been pooled). This loan, however, should all be invested in a project to generate income for the family. Once the loan has been paid, then another member of the group can take a loan. The cycle would then go on until every participant has benefited from the pool of savings”.
It is clear that the members of the savings formation group should know each other well. They can then exert peer pressure so that everyone should feel deeply responsible for paying back the loan taken from the pool, plus some pre-agreed interest. In many respects, this scheme was rather similar to the Grameen Bank concept that was first launched in Bangladesh. Thus, it comes as no surprise that, in the words of Dr. Gayo, “the (savings formation) project was expanded into a kind of Grameen banking when the DSWD provided some funds to the network of small neighborhood groups that had implemented the Piso at Puso Program”.
The initial experience, which proved to be successful, encouraged a few other civil society organizations to adopt the general approach behind the Piso at Puso program. One of these organizations, Family Cooperation Health Services Foundation (FAMCOHSEF), started spreading the adoption of the basic concepts in a few neighborhoods in Metro Manila and in Calamba, Laguna. From the lessons obtained from these organizations, Mr. Tupaz of the Foundation for People Development then proceeded to “export” the concept to small neighborhood associations in Bulacan, Zambales, and Tarlac.
These tales from the field represent “tests on the ground” for broad, general concepts often discussed in seminar rooms and in a few executive offices. They show that families, even from the poorest neighborhood, have some capacity for saving (a peso a day should be well within the capacity of virtually all poor families). But these families would need to be guided and organized somehow so they can function as small “solidarity circles”, whose members encourage each other and exert proper peer pressure on each other. This is where small, more organized civil society organizations can play a pivotal role: an absolute “must” for these civil society organizations is for them to have no motivation other than helping those from shanty neighborhoods to learn the discipline of savings and to start investing in micro enterprises, which they can in fact start up with savings taken out of a pool. However, the savings discipline is learned and acquired from a foundation of shared common values.