The Government expressed its commitment to financial inclusion through the National Financial Inclusion Strategy (NFIS) whose primary goal is to achieve universal access to and usage of a broad range of quality and affordable financial products and servic
women have for a long time been excluded from accessing formal financial products and non-financial services because they are often not tailored to suit their circumstances. Therefore, financial service providers need to recognize that rural women tend to understand complex financial services through simplified informal networks such as and savings groups. These interventions have proved to be instrumental in propagating access to credit and saving facilities among this under-served group.
In order to bridge this gap, various organisations have been implementing the savings groups model which operates on a self-selecting mechanism among community members. It works by pooling resources to create a source of lending funds in accordance with group constitutions that define the terms and conditions of savings, loan disbursements, loan interest rates and repayment plans. Most importantly is that members are given financial literacy lessons in order to understand how the model operates and maximize its benefits.
It has been demonstrated that enhancing women’s direct access to and control over resources is associated with positive economic and social outcomes for women, their families and their communities. When women have access to finances the family tends to benefit most through improved nutrition, health, child enrolment in school and children are more likely to be literate.
Thus, savings groups impact women in a unique way that directly reduces the family’s and ultimately the community's susceptibility to poverty and vulnerability.
In 2017, the Government expressed its commitment to financial inclusion through the National Financial Inclusion Strategy (NFIS) whose primary goal is to achieve universal access to and usage of a broad range of quality and affordable financial products and services. The strategy is aimed at increasing financial inclusion to 80% by 2022 from 59% recorded in the 2015 FinScope survey. The survey also revealed that 20% of the population use informal financial services such as savings groups which play a significant role in expanding financial inclusion, particularly in rural areas and among women.
Furthermore, a 2018 survey by Financial Sector Deepening Zambia indicated that 96.3% of its members were women with an annual membership growth of 16.7%. Additionally, 86% stated that their welfare had improved due to being part of the initiative and 84% had borrowed from the pool for productive investments. This means that, more women are starting to appreciate this initiative, establish meaningful enterprises and successfully replicating it in various communities in rural areas.
Conclusion Notable successes of this model have been recorded in various communities. These include; improved food and nutrition security, improved health outcomes, increased household resilience to financial shocks and stresses, established income diversity and security.
Additionally, members have been able to purchase irrigation systems, increase their agricultural productivity and assets by investing in livestock as well as purchase of solar kits and grow their businesses. Furthermore, this model could help achieve the goals set out by the NFIS that was implemented in 2017. However, there is need to continue strengthening financial literacy programs among rural women to enable them access broader credit facilities for productive purposes. This can be done by developing unique products and services that recognise livestock and farm produce as collateral in rural settings. Similarly, relaxing the procedure of formalising customary land and empowering more women with land could ease access to collateral based loans for rural women.
the Impact of Savings Groups in Uplifting the Lives of Rural Women.