Linkage banking with savings groups: Empowering women

Updated: 21 November 2018 [Inserts Scale2Save programme branding.]​

Sustained access to and use of savings mechanisms like savings accounts contribute to the well-being of people. That is especially true for women, who often manage household finances and childrearing. But women make up a whopping 60 per cent of the world's unbanked. A programme anchored by a WSBI-Mastercard Foundation partnership, called Scale2Saveaims to establish the viability of small-balance savings in six African countries – Uganda, Kenya, Nigeria, Morocco, Senegal and Cote d'Ivoire.

Many of the projects in place use linkage banking with savings groups. By doing this, it empowers women to save towards community and individual goals, accurately track their finances in a digital way, afford better equipment to be applied towards household tasks and economic gain, and set aside money for insurance protection for their children as well as loan repayments. Women-focused projects occur in Uganda, Nigeria and Kenya, countries where women face up to a 20 percentage point gap with men when it comes to being plugged-in to mainstream banking services.

How WSBI and its partners support financial inclusion of women


PostBank Uganda looks to scale up a Village Savings and Loan Associations (VSLA) business model in the country. The bank will look to financially include at least 200,000 new small individual savers by 2020. Women will make up more than a third of new savers. The project comes as Postbank Uganda embraces the challenge of reaching rural women in savings groups through mobile banking. Community-based agents form, train, and refer these groups created under Care International, Catholic Relief Services, and others to PBU. The bank markets its product and opens group accounts on site. It also targets youth groups with a youth friendly mobile App which allows young people to create and follow individual savings goals through it.


Opening individual accounts for savings and VSLA group members can empower women to manage their money individually. KPOSB helps this happen through mobile platform M-Chama. By using M-Chama, savings groups and VSLAs members can “convert" to open individual savings accounts. Members can open savings and transaction accounts with KPOSB remotely, that also enables them to remotely “push" and “pull" funds from their Mchama accounts through their mobile phones. It also allows people to open specific savings accounts: Waridi, especially for Women; Bidii, Step, for youth; and Smata, for younger youth.


LAPO's project, called My Pikin and I, will use not only a mass-market, low-cost microsavings-insurance product through agent networks to reach women, ​but also team up with bodies such as the National Council for Women Societies NCWS. LAPO's savings and insurance bundle is an innovative approach that will allow low-income families to save up small portions of their income conveniently and flexibly in daily, weekly or monthly cycles. It is designed to cater to their needs in areas such as health coverage and their childrens' education.


What is a Savings Group?

  • ​Savings Groups generally consist of 15 to 30 self-selected members from within a community who meet regularly – weekly, biweekly, or monthly – to save.

  • Members' savings create a group fund from which they can borrow as needed and repay with interest.

  • Community-based, SGs are organized and trained in the basics of saving and borrowing, over a set operating cycle of about one year.

  • At the end of a cycle, the entire fund is distributed to members according to the amount each has saved. Groups typically then begin the cycle again. SGs enable members to save regularly in small, flexible amounts; access credit for consumption, investment and emergencies; manage risks through a basic insurance fund; and access a periodic lump sum to pay for school fees, prepare their fields or repair their home.


The big picture: savings groups, women & financial inclusion

The growth of financial service providers like banks in many markets will depend – in large part – on their ability to reach low-income, underserved populations that include women. Within this market segment, it is estimated that there are nearly 14 million members of informal Savings Groups (SGs) across 75 countries worldwide. With total assets between $430 million and $1.2 billion, these savings groups represent a promising pathway for the delivery of formal financial services in new and underserved markets.


>> Learn more: Scale2Save