Date: 2025-07-30 Page is: DBtxt003.php txt00004225
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Brian Gately
Savings Group Conference in Washington, DC--Wow!
Burgess COMMENTARY
Peter Burgess
Peter Burgess
When my friend in Cairo, 'Mac' Abbey, Plan-International's Country Director for Egypt, emailed me to ask if I was attending Oxfam's conference in Arlington, Virginia on Savings Groups, 'Expanding Financial Inclusion and Development', I had to tell him I'd get back to him. I did, and I did. The conference was March 4 and 5 and I attended the first day. I had my doubts at first as to whether it would be worth it.
It turns out I need not have worried. It was MORE than worth it, it was fantastic.
Okay, first things first. What is Plan International, where my friend works? Here is some info from their website:
Founded over 75 years ago, Plan is one of the oldest and largest children's development organisations in the world. We work in 50 developing countries across Africa, Asia and the Americas to promote child rights and lift millions of children out of poverty. In 2012, Plan worked with 84 million children in 90,131 communities. Plan is independent, with no religious, political or governmental affiliations.
And next, who is Oxfam, the conference's sponsor? Here is info from Wikipedia about them:
Oxfam was originally founded in Oxford, UK, in 1942 as the Oxford Committee for Famine Relief by a group of Quakers, social activists, and Oxford academics; this is now Oxfam Great Britain, still based in Oxford, UK. It was one of several local committees formed in support of the National Famine Relief Committee. Their mission was to persuade the British government to allow food relief through the Allied blockade for the starving citizens of Axis occupation of Greece. The first overseas Oxfam was founded in Canada in 1963. The organisation changed its name to its telegraph address, OXFAM, in 1965.
Dear Brian
I almost went to Washington last Monday ... they were doing malaria meetings on Capital Hill but I decided at the last minute not to. On the other hand, if I had known about this event, I think I would have made the effort.
My travel plan would have been an evening bus into Manhattan, an overnight bus to DC, and back the following evening / night. Just like being a student again!
Your story of the conference touched a chord ... in my work in Africa various forms of savings group were in play. In the late 70s I tried to understand when they started, and came to the conclusion that they had essentially been in existence in some form or another since ancient times. While most that I came across were quite small, I remember one that had almost 1000 members with the most beautiful accounting books you can imagine. Every page had the money entries with all the 'thumb prints' beautifully lined up next to each entry.
I wish I had known about your event. Maybe another time.
Peter
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Oxfam is an international confederation of 17 organisations working in approximately 90 countries worldwide to find solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives. Oxfam works directly with communities and seeks to influence the powerful, to ensure that poor people can improve their lives and livelihoods and have a say in decisions that affect them. Each organization (Affiliate) works together internationally to achieve a greater impact through collective efforts.
And most importantly, what are savings groups?
This was the part that was so exciting to me! I didn't have the vocabulary down. It is a changing situation, as well. Another term for savings groups, or SGs, is VSLAs or VSLGs, village savings and loan associations or groups.
The part I was missing, not integral to the name 'savings group' is that savings groups are not only for savings but for loans! As my friend Jeff Ashe calls them, they are 'nano credit unions'. Awesome.
Their popularity is a relatively new phenomenon. They're taking off since 2009 all over Africa and Central and South America and even Asia.
That is not to say that similar things have not existed for millennia, but there is a difference now. Savings Groups are coming into their own as an important way to do financial community development for very poor, disadvantaged people. I asked my guru friend, Professor Ashe, what's the difference between savings groups and for instance 'roscas' or 'sous-sous', other ways to do group savings and lending. Well, the latter two tend to be rotational...that is, only one person has the group's money at any one time. But with savings groups loans can go out to more than one at a time. That is, they are based on accumulation, not rotation.
What about fraud, since they aren't necessarily regulated or audited? I asked Hugh Allen, founder and CEO of VSL Associated of Solingen, Germany about this. What he said is that fraud is kept to a minimum since there is only one locked box with the money and all have to be present when it is opened. He explained that instead of using off-putting double-entry accounting terms, they adopt the language of the user and keep very simple records using their system of record keeping.
Here is more about Hugh Allen and his company, from their website:
Hugh Allen
Chief Executive Officer
hugh@vsla.net
Hugh Allen is the founder and CEO of VSL Associates. He has worked in development since 1970, focusing most of the last twenty years on microfinance and technology-based market development activities. For thirteen years, he worked for CARE and was its Chief Technical Advisor for small economic activity development in Africa. It was during this time, in 1992, that he first came across the VSL model and realised its potential. Hugh is responsible for the overall strategic direction of VSL Associates; and provides strategic and operational planning services to agencies that promote community-managed microfinance. He also conducts training in the VSL methodology and the use of the VSL Associates MIS. He is a faculty member of the University of New Hampshire and the Boulder Institute of Microfinance.Hugh speaks English, French and basic Swahili.
I asked Hugh how did he end up in Germany and he explained that his wife is German and they had to leave Togo and the beer is better. My kind of guy.
So what about no regulation? Hugh doesn't see a problem. Just do it. But some others do see potential problem and have come up with ways of dealing with them including becoming so numerous in any given country that the authorities have to adapt to you and not vice versa. This is, indeed, happening around the world Another view is to stay below the author ties' radar. This also works. Another way is to form linkages with regulated financial institutions such as banks and SACCOs, savings and credit coops.
I, myself, come from a regulatory background, having become an examiner for credit unions here in the US. I move all the way up to supervisory examiner for NYC but then decided I needed to find another job when I was told to find a way to close smaller credit unions in the City 'because they are labor intensive to regulate and represent an undue risk the insurance fund' [akin to FDIC]. So I got another job in credit union development in Bolivia, where I was World Council of Credit Union's project director there for 4 years and met our good friend 'Mac' Abbey (I almost spelled his name like our cat's...oops...) who was Plan's project director there at the same time, mid 1990s.
Again I spoke to Jeff Ashe (professor at Columbia's School of International and Public Affairs--SIPA--where he's asked me to speak as a visiting professor a couple of times). Jeff is also with the sponsor, he is the Director of Community Finance for Oxfam America. He is a former Peace Corps volunteer. He's also been at ACCION and with Working Capital. He was talking about his new book project (more on this below) and about how even in NYC there are a lot of unregulated savings groups--ROSCAs.
At the conference I saw other people I know such as John Tucker, Deputy Director Inclusive Finance at the UN Capital Development Fund (works with our good friend Henri Dommel there) and Bill Maddocks, Coordinator Sustainable Enterprise & Development Program Carsey Institute, University of New Hampshire. Bill was part of the business school of another university that I was a visiting professor at, Southern New Hampshire University, over a period of years when I was part of a program run by the National Federation of Community Development Credit Unions for teaching community development to US and foreign credit union professionals and volunteers. That was a very exciting time.
So what is the takeaway, the most exciting thing about the conference? Microfinance and credit unions are still alive and thriving and growing and relevant! In part this is represented by the sexy Savings Groups.
Here are some photos from my little trip down to Washington, DC, and the conference...
When you are on your own dime as I was, you find a way to economize. This
backpacker's hostel near the White House served the purpose well, for lodging.
The conference was well attended, here at the Sheraton at Pentagon City, Arlington,
Virginia.
Almost right away I run into our good friend Ed 'Mac Abbey (center) and his colleague
Hugh Allen (right). 'Mac' has been in Cairo now, with his family, for over 5 years.
Here's more on 'Mac'.
I also run into Jeff Ashe. He is doing some exciting stuff!
He is in the process of writing his next book, 'In Their Own Hands'.
More about Professor Ashe's book...
I was surprised 'Mac' and Jeff hadn't met before, but they exchange cards now.
Jeff and 'Mac' both have connections to Mali, where Jeff is spending a lot of times
these days on a project there.
I meet some of Mac's colleagues, such as Jenny here on the right from the Dominican
Republic where he used to work.
Oh, why not. A picture of me with the friends, as well. It was a great conference.
Here is the perfect example of why you should take more than one photo of your
friends, so they don't look toothless. Well I only took one, but other than for this effect
it's a great photo of Bill Maddocks. He once referred me to a gig over in Nova Scotia,
where I earned $1000 in one day speaking to the Canadians (who brought credit unions
to us in the US) about community development credit unions. Friends like Bill are good
to have.
Let's look at some of the conference itself...we started off by everyone ululating, or
trying to. I was in the latter category. (I am not good at high-pitched tongue trilling,
even though it's the thing in Africa.)
Where savings groups are located and really growing. The red areas are the hottest
growth regions.
In 2009, just above a million members. Now almost 7 million. Rapid growth.
More very interesting statistics. We are talking 'nano' here from our middle class
point of view. but really big from the members' point of view. I remember one time in
Bolivia my wife Louisa helped a chicken lady in front of our house grow her business
from just selling eggs to buying chickens and selling even more eggs. All on very little
money, but the chicken lady need the push so much. Microfinance.
SGs--savings groups--nano credit unions--work.
What about his regulation thing? VSL = village savings groups. Same as savings
groups. A CARE representative explained why it's important to link savings groups
(VSLs) to larger microfinancial institutions or even banks.
Here is a depiction of how the various groups interrelate. VSLGs--savings groups--are
in the middle.
Here is another slide on how this is going, the linking. It's not possible everywhere, of
course.
Here are Juliette Seban (Int'l Rescue Committee), Aurélie Brunie (scientist) and our
moderator, Reid Hamel. Their topic concerned outcomes for children from savings
groups programs. One country they looked at was Mozambique, where Louisa and
just were in October..
They had an interesting presentation.
Their discussion on Mozambique was fascinating to me.
Here is a slide on the study in Mozambique on Savings Groups. (Mts = meticais,
or singular, metical, the money of Mozambique.)
'Child' is a relative term in developing countries. A 19-year-old with 6 kids is hardly
a kid herself anymore. I first became really aware of how early kids become mothers
in developing countries when I was in Bolivia and flew to a little village on the Bolivian-
Brazilian border. The mayor met me at the grass strip airport and gave me a tour of the
town. He introduced me to one kid and what I thought was her little brother, both standing
in front of a grass hut. their home. My first clue that I was out of it was when he
addressed her as 'señora' (madam) when he introduced me to her. She was 15 or so
but it was her son next to her, not her brother.
Later the mayor told me the most important device (donated by the Japanese) at the
local clinic was an ultrasound machine used to check to see if some young expectant
mothers'-- still growing themselves--bodies were big enough to allow for non-caesarian
childbirth. (Another thing the mayor told me was to please tell the authorities back
in La Paz it's okay if we clear some more trees from the jungle since we need grazing
land for cows for milk for kids. La Paz was worried about saving part of the earth's lungs,
the rainforest.)
'Mac' was in the same breakout session, and is here asking a question.
Monday afternoon there was an open discussion with some donors.
Here they are, the donors. The Melinda and Bill Gates rep is on the left and the USAID
rep on the right, for example.
In the evening, high up in the hotel, there was a cocktail. Great views of Washington,
DC, across the Potomac from us.
Better view of the Washington Monument from the hotel, from the cocktail area.
Next day I say goodbye to my new-found friends at the hostel, where this painting is
hanging, citing a quote from Martin Luther King.
I walk over to Union Station to catch the bus home, passing near the Capitol.
Wow, I settle myself on the Megabus, getting ready for the 5-hour ride back up to
NYC, and totally randomly, as friend comes up and asks, mind if I sit here? It's
Zembaba! Also in microfinance and credit unions. She's worked on starting one in
Queens. She and I worked together on a project translating a Bronx credit union's
documents from English to French for the West African and Haitian community there.
My former employer, National Credit Union Administration, actually paid us for this.
Zembaba is active in Women Advancing Microfinance, is a Columbia SIPA graduate.
She also has her MBA from the business school at Johns Hopkins. She's worked for
Bearing Point and even where my wife is, Citibank. Also she's involved with womens'
programs at the UN. She has connections with Ethiopia and speaks not only English
and French, but also Amharic, a major language in Ethiopia. She also knows Spanish.
It was a fun ride back to NY.
Zembaba hadn't been to my conference, but to another, also in Washington, on diversity and fairness in the financial services sector. Zembaba solved the hotel cost problem...she took the 3 a.m. Amtrak down and was returning by the evening bus...no need for a hotel.
Well, that's it. I am so glad I went to the Savings Conference, 2013. It was only the 4th one ever.
Brian
Brian Gately
Brian Gately Credit Union Consulting Services
910 Park Place 6B
Brooklyn, NY 11216
Tel: 917 566 6357 (mobile), 718 778 9836 (office)
Peter Burgess