Why is saving small amounts of money impactful?
Though saving a couple dozen cents a week does not sound like much, but it is significant. The impact of 20-30 women saving thirty cents a week is catalytic. It causes a chain reaction of change and benefits for both the individuals and communities.
The Impact on Individuals
Saving money for something BIG
The basic purpose of saving is to set aside small amounts of money for something significant in the future. This accumulation of cash can be impactful even if it does not grow interest. Money that is saved can lead to investments in resources that can generate revenue and provide income. Saving money alone is powerful, but savings groups take it a step further.
Access to quick cash in an emergency
In a savings group, each member also sets aside a small amount of money into a separate emergency fund. This money can be used for any immediate needs and does not need to be paid back. One of the biggest challenges of poverty is that when life happens, it is hard to make a comeback. If you are barely surviving and disaster strikes, there are usually no backup or emergency plans. Having money set aside for these unforeseen challenges gives people an option. It helps them to be resilient to the impact of a disaster.
Entrusted with a loan
Living in a rural village on less than two dollars a day automatically classifies a person as a “risky” loan. As a result, no bank will grant a person “at risk” a loan. Any individual’s involvement with a savings group builds the trust in the group. People who otherwise would never have access to loans now has a group to grant them and root for you to succeed.
Saving takes away the stress of a looming emergency or disaster. Saving eases people’s constant worry of changing weather patterns, sickness in the family, or economic disaster. Yes, these things can still happen, but the impact is minimized when people have a back up plan.
The Impact on Communities
The purpose of savings groups is not just to make money; these groups also serve as a support group. Each meeting usually begins in prayer and sometimes worship. Everyone in the group wants to see each other succeed and freely offers advice, support, and spiritual guidance.
Accountability and support between neighbors
Showing up to meetings, bringing the right amount of money, and paying back loans is much easier when you are motivated by love for your neighbors. When neighbors hold members of their savings groups accountable, they are more likely to steward their loans well. Every loan is an investment, making the savings group more inclined to lend a helping hand or offer encouragement.
Money grows year to year
At the final payout of shares, members are able to take this money home. Therefore, they can invest their money into new resources such as business ventures, or continue to save their money. Each year the amount of money saved within the group can grow because the money is being reinvested.
Saving is Powerful Even Outside a Savings Group
Above all, saving is an important tool for any long-term goal, no matter who you are or where you are from. Learning how to save well is a discipline and often hard to do. This is why the support of a community is such an impactful and necessary part of savings. Our Plant with Purpose partners inspire us with their support for each other and ability to harness their collective skills and resources as communities.