Savings Group

What is a Savings Group?

A Savings Group is a community-based financial initiative where a small group of individuals, typically 10 to 20 members, come together to save, borrow, and manage their finances collectively. Members contribute a predetermined amount of money regularly, usually weekly or monthly, creating a common pool of funds. These funds are then used to provide loans to members for various needs, fostering financial inclusion, and enabling economic empowerment. Savings Groups promote financial discipline, self-reliance, and social support, particularly in underserved or low-income communities. They empower individuals to save, access credit, and improve their financial stability while strengthening community bonds and promoting financial literacy.

The Savings Group is a great way to foster discipleship, church planting and Pioneer Business Planting, creating a comprehensive approach to community development.

Advantages of a Savings Group

  1. Financial Inclusion: Savings Groups provide access to financial services for individuals who may not have access to traditional banks or financial institutions, promoting financial inclusion and economic empowerment.

  2. Savings and Asset Building: Members can save money regularly, allowing them to accumulate savings for emergencies, investments, or personal goals, ultimately improving their financial stability.

  3. Access to Credit: Savings Groups offer members the opportunity to borrow from the group’s savings pool at lower interest rates than those offered by moneylenders, helping members meet immediate financial needs.

  4. Community Support: These groups foster a sense of community and mutual support, as members work together to achieve their financial goals and solve financial challenges collectively.

  5. Financial Literacy: Together with our Pioneer Business Planting training, Savings Groups provide financial education and training, enhancing members’ financial knowledge and management skills, which can benefit them and their families in the long term.

Organizational Structures of Savings Groups

  1. Normal Savings Group: Comprising 10 to 25 individuals (or up to 50 in certain cases), these groups meet weekly to purchase shares, with each member buying between 1 and 5 shares. The share price is fixed for a cycle, and members can save varying amounts. Elections are held to ensure fair leadership representation, typically consisting of a President, Treasurer, and Secretary.
    1. Loans: Savings Groups maintain a loan fund from which members can borrow up to three times the value of their savings. Loans have a maximum repayment period of three months and offer flexible installment options, unlike the rigid repayment demands of formal Micro Finance Institutions (MFIs).
    2. Social Fund: Some Savings Groups establish a social fund, functioning as a simple form of insurance. Members contribute a predetermined amount at each meeting, which can be used to cover personal emergencies.
    3. Share-outs: At the end of each cycle, all loans are repaid, and the accumulated savings, interest income, and fines are distributed among members in proportion to their savings. Members can choose to reinvest this money, kick-starting a new cycle with a substantial balance and quick eligibility for larger loans.
    4. Record-keeping and Finances: Savings Group finances are managed through bank accounts, Mobile Money accounts, or money boxes. Transparent record-keeping, including passbooks and cash balance records, ensures accountability and trust within the group.
  2. Table Banking: a variation of Savings Groups where a minimum of 5 participants contribute a set amount regularly. The accumulated funds are then given to one individual to start or expand their business. Every participant of the groups gets a chance to receive the funds for their businesses. The selection process often involves assessing a written business plan. In these variations, there are no share-outs.

Table Banking in Kenya

One of our leaders gathered 30 men that were employed as motorbike taxis. Each person saved KES 1,000 per week (around $8). Within two weeks they saved KES 60,000 and could make a down payment of half of one motorbike. One person would own the motorbike now, earn 3 times the income they did when employed and paid off the remaining money for the motorbike themselves. They continued this process until everyone received a motorbike.

Increase in the number of businesses operated by households in program areas
1 %
Increase in the duration of mostly short-term seasonal business activities
1 %

Savings Group Impact

Research conducted in Ghana, Malawi, and Uganda has demonstrated the positive impact of Savings Groups on financial inclusion, business activities, women’s empowerment, and resilience in the face of unexpected events. Increased savings, improved access to credit, and enhanced microenterprise outcomes were observed across all three countries.

Business activities are positively affected by Savings Groups, leading to a 6% increase in the number of businesses operated by households in program areas, and a 9% increase in the duration of mostly short-term seasonal business activities.


  • Take-up Rate refers to the percentage of households participating in the Savings Groups.
  • Savings Completion Rate indicates the percentage of members who completed at least one savings cycle and received their savings and interest share-outs.
  • Loan Recipients shows the percentage of members who received at least one loan from the group.
  • Financial Inclusion Improvement represents the improvement in financial inclusion among female respondents, including increased savings and access to credit.
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