Savings Groups Empower Communities in Nigeria
Photo by Mercy Ogbaji/CRS
A 14-year conflict in Borno state, Nigeria, has left communities in the Jere Local Government Area with limited access to financial services. Without a reliable bank or any other formal institution, many rely on informal credit sources, which can hurt their chances for economic growth.
Transitioning Households to Recovery from Vulnerability, or THRIVE, is a program funded by the U.S. Agency for International Development. THRIVE works to increase access to economic opportunities and build resilience in Jere, where Catholic Relief Services promotes collective savings and transparent lending practices through its Savings and Internal Lending Communities model, or SILC.
Before SILC groups, many people used piggy banks, called asusu, to save their money.
Hadiza Adamu sits with other community members during a savings group meeting in Borno State, Nigeria.
Photo by Mercy Ogbaji/CRS
Hadiza Adamu, who lives in the Muna Moforo community, struggled with saving this way.
“What I used before was asusu. I bought one which I used to save money. Anytime I sold my goods, and I made a profit, I put money inside it. But then, anytime I had some need for cash, I opened the Ausu, so I was not really saving,” Hadiza says.
Additionally, the lack of financial literacy and access to formal financial services compounded the challenges faced by community members.
A savings solution
Maryam Abdullahi calculates her group’s savings in Muna Kolori, Borno State, Nigeria.
Photo by Mercy Ogbaji/CRS
Recognizing the need for a structured savings mechanism, THRIVE conducted community meetings and training demonstrating the benefits of savings groups that can improve the communities’ financial literacy and knowledge of transparent lending practices.
THRIVE also helped establish new SILC groups, guiding participants through the formation process, rule-setting and regular savings routines. Once a savings group is established, members take ownership, which is key to group sustainability. Many say SILC groups enable them to access credit with dignity.
How SILC has transformed the communities
Members of the Kungiya Nasara Jaari savings group review their savings for the week in Borno State, Nigeria.
Photo by Mercy Ogbaji/CRS
THRIVE participants now boast of newfound financial discipline and easier access to credit and small loans. Moreover, SILC groups have fostered a culture of regular saving and accountability, reducing their risk of falling victim to loan scams or exploitation from disreputable credit sources.
Maryam Abdullahi, who from the Kolori community, remarks on her community's solidarity and willingness to support one another through mutual contributions. She can see the social cohesion that has been fostered by SILC groups.
“Those of us who are part of this meeting and contributed really enjoyed it. There are women among us who gave birth and were assisted by our contributions. Three members of the group have had babies. The group members are willing to help each other for the costs of other social events,” says Maryam.
The impact of SILC extends beyond financial resilience to promote personal and community empowerment. Fatima Mohammed, another SILC group member from Kolori, says her financial skills have improved because of her membership in SILC.
Fatima Mohammed says she is excited about how much her financial skills have improved since she joined a savings group supported by CRS.
Photo by Mercy Ogbaji/CRS
“Before SILC, I didn’t know how to do basic sums. But now I can do long calculations in my head. I know that if I add some numbers together, it will give me a bigger sum, even if is a big number. Now I am happy that my brain has opened to doing long calculations,” Fatima says.
While savings groups have proven effective for increasing household income, there are conditions that are important for sustaining them. These include ensuring the ongoing ownership and management of savings group by participants who have received adequate training on financial literacy. With continued training, these members can go on to support the establishment of new savings groups. SILC groups also need regular quality checks and monitoring to ensure members maximum impact from their savings. In addition, promoting the participation and leadership of women is critical for the success and sustainability of such community initiatives.
