The Bill & Melinda Gates Foundation $11.7 million grant
International development and relief organization Oxfam America today announced it received an $11.7 million grant from the Bill & Melinda Gates Foundation for Saving for Change, the organization's unique community finance program. Oxfam will continue to collaborate with Freedom from Hunger and Stromme Foundation to launch an unprecedented expansion of Saving for Change over the next three years.
Oxfam's innovative approach to community finance breaks with that of traditional microfinance institutions. Saving for Change trains large numbers of savings and credit groups in the poorest regions of the world to save together and make loans to each other with their own resources instead of taking out a loan from a bank, credit union or microfinance institution.
"The first Saving for Change group was trained three years ago. Today, over 150,000 villagers in Mali and Cambodia have already joined savings and lending groups," said Raymond C. Offenheiser, president of Oxfam America. "With the support of the Bill & Melinda Gates Foundation, we will reach close to 550,000 villagers in the next three years."
With this growth, Saving for Change will become the largest microfinance program in these two countries and the only one reaching the rural poor at this scale. Village groups act as their own community banks, providing villagers with a place to save and easy access to loans. As a result, poor people living in remote areas with little or no financial institutions can access self-managed financial services to build assets, increase incomes, and improve the livelihoods of their families.
"Not only is Saving for Change different because it is based on saving instead of borrowing, it also relies on person-to-person training and relationships instead of technology. This helps build trust and ultimately makes the savings and lending groups more sustainable," said Offenheiser.
Oxfam will use this grant to replicate its community finance model in communities throughout Mali and Cambodia. In addition, it will allow the organization an opportunity to explore further program growth in Latin America.
Millions of people in Asia and Africa live on one dollar a day or less, and few have access to savings or other financial services that can help them increase their financial security and improve their lives. Without places to save, it is difficult for families to build savings to pay for educational fees, medical bills, or emergencies. Others have little or no access to micro loans that could improve their incomes through investments like setting up a small sales kiosk, buying crop fertilizer, or acquiring an animal for breeding.
Funding to expand Saving for Change comes from the Bill & Melinda Gates Foundation's Financial Services for the Poor initiative, which works with partners to make savings and other financial services available in developing countries so the poor can better manage life's risks and take advantage of life's opportunities.
"The innovative savings and lending approach has been successful at bringing affordable financial services to people with very low incomes living in remote communities," said Bob Christen, director of the Financial Services for the Poor initiative. "We believe that Saving for Change's groups will open the door to opportunity and increased household financial security for many poor people."
The grant also supports program evaluation and research that will help document and fully measure Oxfam's impact on communities. Researchers will be asking key questions on the affect participating in Saving for Change has including:
Does it affect how-and how much-women save and borrow?
Does it improve risk-coping and food security?
Does it build crucial social networks and businesses?
And, does it improve agricultural production?
"The research component of this grant will help us fine tune our program so that it best meets the needs of the poor," concluded Offenheiser. "Documenting Saving for Change's success will also help build momentum for expanding savings-led community finance programs around the world."
Saving for Change is implemented by Oxfam America in collaboration with Freedom from Hunger and Norway-based Stromme Foundation. Freedom from Hunger's support includes developing training manuals, and contributing technical assistance for the planning, implementation and evaluation of the program. Stromme Foundation, along with The Bill and Melinda Gates Foundation, underwrites the costs for the teams training savings and lending groups in Mali.
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