Expanding Financial Inclusion in Africa (EFI) is a project managed by Catholic Relief Services (CRS) and funded by Mastercard Foundation (MCF). From 2013 to 2017, the project aimed to create 19,200 new Savings and Internal Lending Communities (SILC) groups with 502,320 members in four countries in Africa – Burkina Faso, Senegal, Uganda, and Zambia – and in doing so to reach the poorest in the community, the most vulnerable, so they could become more resilient to both acute and chronic shocks.
As of August 26, 2017, the project has surpassed the original target of reaching 502,320 by 8% – EFI Africa has created 20,273 SILC groups, reaching 543,220 SILC group members. More importantly, 67% of the SILC group members are in the poorest half of their community. In short, the EFI project has already met and exceeded its two principal goals.
How is the CRS SILC model expanding and sustaining financial inclusion?
The world’s poorest people also need access to financial tools and services to smooth their consumption and invest in income-generating activities, but most formal institutions are unable or unwilling to invest in reaching the poor. In 2006, to close the gap between need and availability, and to create a more sustainable model, CRS shifted from a credit-led to a savings-led microfinance approach. Following a trend set by other INGOs, CRS refined the savings group methodology and developed the SILC Private Service Provider (PSP) model. CRS has continued to do research on the PSP model and the EFI project has contributed significantly to this body of knowledge To learn more about the SILC-PSP methodology, visit our page ‘SILC & PSP Methodology‘
EFI has invested in the recruitment, training, and certification of 832 PSPs in Burkina Faso, Senegal, Uganda, and Zambia. With 832 PSPs and 20,400 SILC groups, the average PSP manages a portfolio of 25+ groups and 650+ members. Often, they balance this work with other income-generating activities like agriculture or running a small business. PSPs are energetic and entrepreneurial, working hard to make ends meet and supporting other members of their community to do the same thing.
The financial profit for the PSPs and the SILC households is easy to calculate: The average PSP is getting paid by more than 20 groups and earning approximately $50 per month. SILC group members are saving about $63 dollars per year and are receiving a 26% return on their savings, amounting to nearly $80 per year.
Seventy-eight percent – over 410,000 – of these SILC group members are women. For many women in Africa, participating in SILC is the first opportunity they have had to access a structured savings product. The SILC methodology offers them flexible, hassle-free loans that enable them to address their family’s lack of food and income. The low dropout rate – less than 1% – demonstrates the poor can save and realize personal and social benefits as well as financial profits.
Photo by Henry Tenenbaum Photo by Henry Tenenbaum
Women’s personal and social benefits are myriad, if harder to quantify. Evidence from in-depth interviews with SILC group members and field observation shows that many of the female SILC group members gain more confidence and control over their finances, as well as a greater voice in household and business decision-making. Additionally, both men and women in SILC are empowered as they see that the group they created and the savings that they generate and manage opening up new possibilities for a brighter future.
Access to appropriate financial services is one of many challenges for the poor and SILC services are effectively meeting that challenge. Prior research documented the effectiveness of SILC groups and called for a massive scale-up – the EFI project has met this demand by expanding SILC services, and the many benefits that they offer, to 543,000 households and counting.