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Offering Individual Savings Accounts with Group Savings is a Win-Win for Clients and Institutions

Offering Individual Savings Accounts with Group Savings is a Win-Win for Clients and Institutions

October 25 , 2016
Lilongwe, Malawi - 

Guest Post by Anjali Banthia, Specialist, Women's World Banking, Consumer Insights and Engagement

When saving money in a bank requires long and expensive bus rides and comes with high monthly fees that can together total up to more than a customer can afford to deposit, it doesn’t make much sense to use banks to save. That’s one of the reasons why low-income customers in remote rural villages in Malawi use village-based savings groups to save their money. NGOs like CUMO Microfinance (a Malawi-based non-profit with project funding from UNCDF MicroLead) administer these groups. But it is the members who run the group which provide opportunities to save as well as borrow.

Members are delighted with the services organizations like CUMO provides, but a closer look by Women’s World Banking showed that savings groups do not always meet all of their customers’ financial needs. Members could benefit from a fuller package of financial tools to help them manage a variety of their requirements. Seeing an opportunity in this gap, Women’s World Banking conducted an in-depth research study with CUMO group members in conjunction with our partner and Malawi’s largest bank, NBS Bank in March of this year. The objective of the research was to understand group members’ unmet financial needs and how NBS Bank could complement the offering provided by CUMO.

To learn the pros and cons of local savings groups, read more here.

About Women's World Banking

Women’s World Banking is a technical service provider for one of UNCDF’s MicroLead projects.  The project is in Malawi and works with NBS Bank to support its new strategy to downscale into rural areas. In order for more low-income women to have access to financial products than ever before, Women’s World Banking works closely with its global network of 40 financial institutions from 29 countries to create new credit, savings, and insurance products specifically designed for the unique needs of women.

About UNCDF MicroLead

MicroLead is a UNCDF-managed global initiative challenging regulated FSPs to develop and roll-out deposit services which respond to the rural vacuum of services. With the generous support of the Bill & Melinda Gates FoundationThe MasterCard Foundation and the LIFT Fund in Myanmar, MicroLead works with a variety of FSPs and technical service providers to reach rural markets, particularly women, with demand-driven, responsibly priced products offered via alternative delivery channels such as rural agents, mobile phones, roving agents, point of sales devices and group linkages. This is combined with financial education, so customers not only have access but can effectively use quality services.

For more information, please contact
Pamela Eser
Advisor, MIcroLead
Additional Information
Pamela Eser
Advisor, MIcroLead