It is unbelievable that our project, Expanding Financial Inclusion in Africa, will present its results and findings to the microfinance world at the 2017 SEEP Annual Conference next month. What is the EFI Africa project, where did it come from and what did we set out to achieve?
Savings and Internal Lending Communities (SILC) are Catholic Relief Services’(CRS) model for savings-led microfinance. Self-selected members can save weekly in groups of 15-30 and borrow from the funds they save – with no external capital injection – and the benefits of increased financial inclusion. At cycle end, they get back their savings plus a share of the interest repaid by all members.
Why Was the EFI Project Set Up?
In several critical ways, EFI responded to the achievements and learning of CRS 2008-2012 SILC Innovations Project supported by the Bill and Melinda Gates Foundation. The SILC Innovations Project’s objective was to develop and test a fee for service model for SILC that could be replicated in almost any context – one model, any context, it would work. A fee for service model was a solution to the problem of funds running out, projects closing down, and their highly trained agents looking for other jobs – no matter how large the unmet demand is for SILC.
What drove the Innovations Project was the hunch that entrepreneurs, driven by their need to earn, would perform better than project paid agents. However, the designers of the model knew that they were taking a substantial risk: independent agents might only want to work with those who could pay them or they might not earn enough, thus either dropping out or asking for higher pay from their members.
Through a randomized control study to see how the fee for service model performed against a more traditional project approach, the SILC Innovations Project looked at a range of indicators: who reached the poor, numbers and quality of groups, performance across financial and membership measures, agents earnings and overall member satisfaction.
While the Innovations project gave us robust evidence that the PSP model was viable; as projects do, it also generated a new set of questions and challenges. EFI rose to the challenge and in 2013 we began the work.
What Did We Set Out To Do?
- Experiment with fresh ways of reaching poorer people through adapting the SILC package – to ensure that poorer households were not being excluded from the benefits of financial inclusion and enhanced resilience
- Understand how members used the financial tools offered by SILC – what did members do with loans and share-outs, what other financial tools were they using, did being in SILC change their financial behavior, how did they spend or invest their money, especially the poorer members and women
- Analyze high-level and in-depth poverty dynamics through a range of monitoring and research tools to see whether we were reaching poorer households over time, and through an innovative ethnographic study, map the dynamics at community level that either attracted or excluded poorer people
- Strengthen the fee for service model by forming self-supporting PSP networks for mutual support, quality assurance, apprentice recruitment and identifying development linkages for SILC groups (and not forgetting to look at the impact of this on SILC members)
- See how our PSPs were managing after several years of work
- Develop a long-term savings package in Uganda for SILC members to add a much-needed financial tool to the portfolio of poor people through a potentially exciting if challenging partnership with the private sector.
How Has EFI Done? Find Out at the 2017 SEEP Annual Conference!
Did we go poorer? Do we have a sustainable model? Did agents continue working as PSPs after being paid by the project? Did we get to half a million members? Join us, at the post-conference event after the SEEP Annual Conference to find out! These are the questions that will be answered on October 5 at the Expanding Financial Inclusion in Africa Learning Event when CRS presents the findings of 4 years of operations and research. At the 2017 SEEP Annual Conference, EFI Africa will also be sharing key strategies for client empowerment at a Peer Learning Session with MicroLead, CARE, and Itad titled, Empowering Clients through Data Driven Decision Making, Innovations in Service Delivery, and Technology-driven Solutions.