To complement our alternative livelihood programmes in Madagascar, we have been supporting communities to establish savings and loan groups since 2017 via partnerships with rural development specialists. We have partnered with Aga Khan Foundation to support Community-based savings groups (CBSG) in northwest Madagascar, and with Catholic Relief Services (CRS) to support Savings and Internal Lending Communities (SILC) in southwest Madagascar.
Community savings and loan groups are low-tech solutions which enable people to save money and access credit in remote areas where there are no banks. Mostly facilitated by trained community members with support from NGO staff, these community groups pool together their savings in order to address financial hardship and provide loans to those within their group. Members are then able to pay interest and repay loans so that other group members can do the same. After one cycle – typically 9-12 months – groups can access their savings, which includes the interest paid from loans.
In the southwest region of Madagascar, SILC groups supported by CRS and Blue Ventures have around 4,000 members. Some of these groups have recently come to the end of their cycle, as Solontena Raivosoa, Blue Ventures’ outreach field technician in the area, reports:
“Some groups have begun to come to the end of a cycle, so they have redistributed the money with interest! This particular group that redistributed on April 11th 2020 had close to 70% interest in 9 months of savings and loans. This is extremely helpful during this COVID-19 crisis.”
Since the rise of the COVID-19 pandemic, Blue Ventures’ field teams have seen these community groups proving their value, providing a lifeline for families whose income opportunities are dwindling as a result of the crisis.
In southwest Madagascar, to ensure SILC groups can continue to operate effectively whilst respecting health and safety guidelines, the Blue Ventures team have been training the community SILC facilitators in preventative measures. SILC facilitators from Velondriake, Teariake and Manjaboake LMMAs have been given masks and hand washing stations so that local people can continue to receive savings interest and request loans, whilst limiting the risk of the virus spreading.
In the northwest of Madagascar, the CBSGs have also continued operating by changing the way they run their weekly meetings; rather than gathering all the members to make their weekly contribution and possibly take a loan, the President, Vice-President and Treasurer meet in the house where the cash is stored, and receive each member one by one. Everyone wears face masks, and a hand washing station has also been set up by the entrance.