Savings-led Microfinance Profile

CRS Mali

Empowering Women through Savings and Families Internal Lending Communities Building the Capacity of Poor Rural through Savings
Background of Microfinance in CRS Mali
In 2006, Catholic Relief Services Mali (CRS Mali) began implementing savings-led microfinance activities as a livelihood strategy in response to a locust invasion and drought which affected the people of northern Mali. These rural farmers and herder households were going hungry because they had not been able to produce enough food or generate enough income to meet their needs. At the same time the only credit available to them was short-term and at very high interest rates, and thus not an option. To mitigate the negative effects of this crisis, CRS Mali, with funding from the Bill & Melinda Gates Foundation, initiated a pilot project, which introduced the Savings and Internal Lending Communities (SILC) methodology to these populations in order to strengthen their economic resilience and household food security. During this pilot project, SILC training was integrated into farmer field school and agro-enterprise activities to ensure rapid comprehension. Very quickly the SILC model proved to be incredibly popular. Given the ease of replicating the model, the number of groups grew rapidly. Since the beginning of 2007, CRS Mali and its partner institutions have formed 307 SILC groups with 8,000 members. These groups have been able to save more than $50,000, with members earning an average annualized return of 25 percent on their savings. The rate of loan repayment in these groups is 99.7%.

Integration of SILC with Other Programming Sectors

CRS Mali has been able to expand upon its the initial successful SILC pilot by integrating SILC within both an HIV project and with a School Feeding and Child Nutrition project. These initiatives demonstrate the value of using SILC to complement and strengthen other CRS programming areas. The strong skills which result from participation in SILC groups not only help members to better manage and grow their financial resources but also to strengthen the local support structures within their communities. This has led CRS Mali to incorporate SILC into its projects to help beneficiaries lead full and productive lives, meet their basic needs in a sustainable manner, and live with dignity in a more supportive social environment.

Integrating SILC into HIV Programming

In addition to the HIV project, SILC in Mali is currently being integrated to address chronic food insecurity through the Project School Feeding and Child Nutrition Project. This project began in January 2008 with funding from the United States Department of Agriculture and for a three year period. The project is managed in partnership with Caritas Mopti and AMPRODE/Sahel. It expects to form more than 60 SILC groups, with approximately 1500 members over the three years. CRS Mali is also implementing the Nema Program, a Multiyear Assistance Program designed to strengthen the food security of vulnerable households and communities, in partnership with Save the Children , HKI and local partners Caritas and Tassaught. The integration of SILC with agroenterprise activities will be an important part of this project. The Nema Program presents an definite opportunity for CRS Mali to scale up its SILC activities.

The Saving and Internal Lending Communities Methodology

The SILC methodology is a simple, savings-led microfinance model that provides access to group-managed, transparent financial services to people who are often excluded from local microfinance services because they are either too poor or too remote from the urban or village institutions. SILC creates a secure, local financial system with positive returns on savings, using a self-managed internal loan fund. It promotes the creation of a social insurance fund to address emergency situations, to which members contribute regularly and which all can access in time of need.

Mali

Savings-Led Microfinance Profile

infections and parasitical illnesses and around themes such as water and sanitation. Discussions progressed to SILC can address economic opportunities to help reduce the financial effects of HIV and AIDS. Positive focus group discussions indicated that access to SILC loans and social fund to cover healthcare costs for members and their children was critical for accessing health services. Another important outcome was the increase in the number of women went to get tested as a result of the information that they received during the SILC meetings.

The initial skepticism in these communities has therefore been replaced with enthusiasm for the SILC model. For example, Fr. Oscar, a Missionary of Africa priest in the parish of Diou, noted that when he first heard about a mechanism to help save and self-manage financial resourcesparticularly without external financial support he was skeptical that it would work. He was therefore pleasantly surprised to see the success of the SILC groups in the community and remarked that, It is excellent that women have access to this money. During focus group discussions with SILC members in Sikasso, Mali, it quickly became evident that participation in SILC helped members to build community spirit, repair relationships and even provided a model by which other community decisions could be made. Respondents noted time and again that they valued the social cohesion developed as a result of SILC more than anything else. After participating in SILC, with its participatory and democratic process for establishing its by-laws, women in one community decided to revamp the by-laws of the largest community development womens association using the same methodology as introduced by SILC. The women convinced the village authorities that the rules of the association needed to be elaborated in a more participatory manner, as in SILC, and it was done. This has led to a positive improvement in local participation in community activities. CRS Mali sees SILC as an important tool for strengthening the economic well-being of the people it serves; e.g., the poorest and most vulnerable population. Project staff appreciates how well adapted the methodology is to the local context, and how SILC can be a beneficial component of projects across a variety of sectors. As such, demand for SILC in Mali is so strong that CRS estimates that it could reach 100,000 people within 5 years with an investment of approximately $2 million, which is equivalent to $20 per SILC member trained. This is a small amount compared to value of these SILC knowing how to better manage their scare financial resources to positively change their lives and those of their communities.

Integrating SILC and Food Security

In addition to the HIV project, SILC in Mali is currently being integrated to address chronic food insecurity through the Project School Feeding and Child Nutrition Project. This project began in January 2008 with funding from the United States Department of Agriculture and for a three year period. The project is managed in partnership with Caritas Mopti and AMPRODE/Sahel. It expects to form more than 60 SILC groups, with approximately 1500 members over the three years. CRS Mali is also implementing the Nema Program, a Multiyear Assistance Program designed to strengthen the food security of vulnerable households and communities, in partnership with Save the Children , HKI and local partners Caritas and Tassaught. The integration of SILC with agroenterprise activities will be an important part of this project. The Nema Program presents an definite opportunity for CRS Mali to scale up its SILC activities.

SILC and Womens Empowerment

SILC has shown to be an important mechanism for encouraging an increasingly active participation of women in the development activities of CRS Mali and partners in those communities. Given that 98% of SILC participants in Mali are women, the SILC group offers an important space for women to develop leadership skills and discuss solutions to common problems. In the parish of Karangasso, the General Secretary of the Mayors office, Laurent Coulibaly, whose wife and mother participate in SILC, noted that the women are (now) managing their own resources and their participation enables them to save some money for the family. He noted for example that his wife is now willing and able to pay for the milling of grains herself.

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For more information on CRS Malis savings-led microfinance activities, please contact Chery Traor at traore_chery@yahoo.fr or the CRS Microfinance unit at mu@crs.org
CRS serves the poor in more than 100 countries on five continents and ranks among the worlds major players in microfinance. Its investments in microfinance have helped to eliminate sources of economic injustice around the world.