Why Savings Groups?

Most formal financial institutions are unable to reach the world’s poorest people, who greatly need access to a range of financial services. To address this need, we help community members form savings groups, pool their savings and make loans to each other. This approach has created economic opportunities for nearly 5.5 million people who live in the world’s most impoverished areas.

CRS provides training and capacity strengthening to new savings groups, using a highly sustainable market-based approach. Upon completing their first cycle, which generally lasts 8-12 months, CRS savings groups can operate on their own.

CRS’ savings group methodology, called Savings and Internal Lending Communities (SILC), is a holistic, savings-led microfinance approach that provides a safe place for poor households to save and borrow to increase their income. The goal is to help these households better manage their existing resources by teaching them basic financial management skills.

This brief shows how CRS SILC groups lay the foundation for resilience.

I am depending on myself.

Lisa, a SILC participant in the Dominican Republic

Learn More about Crs’ Savings Groups

Achieving Sustainability

CRS has developed a sustainable way to help SILC groups support themselves. We train community members who are social entrepreneurs to promote and support SILC and certify them as Private Service Providers (PSP). These PSPs then train SILC groups and support their operations and teach them skills in problem solving, recordkeeping and calculating interest and end-of-cycle share-out. In return, SILC groups pay the PSPs a reasonable fee for their services.

This two-page handout, "CRS and Savings-Led Microfinance," provides an overview of the approach, strategy, and successes of the CRS SILC program.

Reaching Young People in the Classroom

Classroom SILC Helps Students Cultivate Good Financial Practices

The classroom SILC approach was developed to help children and adolescents learn how to use money responsibly and develop organizational and leadership skills in a safe school environment, guided by their teachers and parents. Developed and implemented by CRS staff in Central America, classroom SILC has been implemented in McGovern-Dole Food for Education projects in Guatemala, El Salvador and Honduras and a Mary and James Perry-funded project in El Salvador and Honduras. In 2023, CRS assessed the interventions’ effectiveness and found that participation in classroom SILC helps students save money regularly, set SMART and safe financial goals, participate in their households’ financial planning, and prepare for their financial futures. In the classroom, SILC reinforces key values and skills useful to students’ lives, including financial responsibility, discipline, leadership and empathy; and improves their performance in key academic subjects, principally Spanish and mathematics.

Meeting Faith Community Needs

CRS Offers Sharia-Compliant SILC Groups

In response to CRS’ concern to serve excluded poor and marginalized communities, we have designed a sharia-compliant version of SILC. Learning from the pilots in Mauritania and Sudan (2015-17) was used to finalize the model for implementation at scale in Niger. Sharia-compliant SILC provides members with the same range of financial services provided by conventional SILC but observes Islamic finance principles as identified within the sharia. It eliminates interest and penalty fees on loans and allows (but does not obligate) groups to charge a flat, uniform loan processing fee (irrespective of loan amount or duration) to compensate for the group’s efforts to manage member savings and make them available for borrowing. While borrowers are only expected to repay the loan principal, those whose loan use is profitable may voluntarily give an additional amount to the group as a show of gratitude, following the precepts of qard hasan lending. The training guide is available online.