Promotion of Rural Savings Through Microfinance: The Experience of Sinapi Aba Trust in Ghana

SINAPI ABA TRUST, the leading microfinance agency in Ghana with over 55,000 clients observed that majority of its clients have not only developed the culture of relying on loans for a long time, but some were even borrowing money to pay their compulsory savings required for loan security. The organisation therefore introduced a progressive savings scheme intended to help clients to accumulate more funds for their domestic and business needs and ultimately enhance their financial security. From institutional point of view, it was also expected that these savings will generate additional funds to augment the loan portfolio.

This study was initiated to assess the performance of this scheme and its impact on both clients and the organisation. The study has revealed that rural poor borrowers have the capacity to save substantial amounts progressively if they are given the opportunity, motivation and a supportive institutional framework. Their voluntary savings through this scheme has increased tremendously within 12 months. The funds mobilised from the savings scheme constituted about 26% of the loan portfolio. In short, this experiment has established the capacity of microfinance schemes in mobilising local capital for the development of the local economy.

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