A Technical Guide To Savings Mobilization: Lessons from the Credit Union Experience
Growing evidence has shown that while the poor can and, indeed, do save, their ability to do so is hindered by the frequent lack of access to reliable, secure and convenient savings services. At the same time, savings deposits to microfinance institutions (MFIs) can represent a relatively stable source of funds that can be invested in housing and microenterprise loans, and enable them to become more self-reliant and sustainable financial intermediaries.
The World Council of Credit Unions (WOCCU) savings-driven credit union development programmes worldwide have demonstrated that low-income people will substantially increase their voluntary savings deposits if they are provided with a safe and convenient place to do so. This is particularly significant since voluntary savings are by far the most common source of funding for microenterprise startup and expansion, and can help to reduce their vulnerability to future risks.
However, WOCCU maintains that, despite its potential, many existing microfinance institutions are not in the position to begin mobilizing savings responsibly. This Technical Guide is intended to share lessons from the experience of grassroots, savings-driven credit unions to MFIs legally authorized to capture savings, such as postal savings banks, non-governmental organizations (NGOs) that have transformed into legal financial intermediaries and finance companies.
The guide provides details on how to:
- Determine if an institution is ready to mobilize savings
- Prepare to capture savings and protect them once captured
- Provide what savers most value: safety, convenience and returns
- Develop savings products and conduct marketing campaigns
- Set market-driven interest rates with real rates of return
- Manage savings, ensure liquidity and improve efficiency