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Rotary and Savings Groups in Central America
Category: Economy | By SDR, 5-Feb-2020 | Viewed 359  Comments 0 | Source Jeff Ashe

How Rotary Clubs Can Empower and Help Bring Prosperity to Central America's Poorest Women

Jeff Archer


We are seeking $40,000 in funding from one or a consortium of Rotary Clubs interesting in reaching village women living in the most impoverished regions of two of Central America's poorest countries, El Salvador and Guatemala:    


> Further empower the 40,000 women already organized into 3,000 savings groups in nearly 1,000 villages in Guatemala and El Salvador by providing support to the trainers and the volunteers who previously organized and supported these groups.
> Interview ex- trainers and volunteers who trained groups in El Salvador and Guatemala between 2008-2013 to explore their ideas for incorporating the poorest into groups, training children's groups, reaching more remote villages, and organizing groups into networks for mutual support and learning. New partnerships with municipal governments with resources to pay the trainers and provide access to government services and NGOs that can add additional elements to the saving and lending model
> These savings groups with their financial clout, solidarity, and organizational savvy are ideal platforms for other interventions. 
> Secure funding to underwrite "genius awards" for up to 25 ex-staff and volunteers as well as underwrite the costs of identifying and convening the "geniuses,"  monitoring and evaluating the outcomes, and disseminating what was learned. Each "geniuses"  is expected to train several more groups. 
> Develop a plan so that the groups will pay for the help the "geniuses" provide to the groups. In this way they will be able to continue their work for years come.
> Meet regularly with "geniuses" as a group to review their progress, share learning, set new objectives, and develop a sense of community. 
> Present findings to replicate this model in other countries with savings groups. 
We expect that building on existing groups and capacity and identifying those who are most committed to their communities will prove to be extraordinarily cost effective and sustainable. 

Savings, the first Step in Women's Empowerment and Prosperity

In their Ahorro Comunitario (Community Savings) groups in rural Guatemala and El Salvador, 10 to 20 women meet every week or two. They set aside as much as they can, ranging from a quarter or a few dollars at each meeting. As the group fund grows, members request loans that are repaid with interest once they are reviewed and approved by the other members. The collective savings of the members, the interest charged on loans, and income from collective activities are distributed at the end of a six-month or yearlong cycle, according to the amount each has saved. Instead of paying interest to financial institution, the women group members realize a substantial return on their savings.

The money saved and distributed in the groups is mobilized by the women themselves. There are no matching funds from donors or loans from banks and microfinance institutions. Even the poorest " even if they do not believe it possible " are not too poor to save. For the poorest, savings is more important than borrowing; loans are too risky for the very poor (and even the not so poor.)  

The economic independence and solidarity and mutual support these women achieve through their own effort is the first step to their empowerment. With the confidence and skills learned in their groups some have gone on to assume leadership roles in their communities and local governments.


As of the end of 2016, there were 1,061 groups in place in El Salvador with

18,464 members

. Despite the efforts to link the groups to formal financial institutions, it is significant that 49 times more loans were made from the group fund than from banks and microfinance institutions, underscoring the importance of these groups for the members (and the scant interest that financial institutions have in serving this population.)

Ahorro Comunitario was introduced to Guatemala in 2010. As of the end of 2016, there were 1,122 groups with

21,877 members

in the Departments of Alta and Baja Verapaz. Between 2010 and 2016, these groups made

27,430 loans

to their members.  As in El Salvador, women preferred the savings groups over the banks as it provided them with a more convenient, simple, and profitable process. 

Reasons for success:

The success of Ahorro Comunitario depends on the committed promotoras and volunteers who trained and supported the groups.  For most, their work training groups was a continuation of their work in their communities that started when they were teenagers. 
The proposed project will identify and provide small "genius grants" to the most committed of the trainers and volunteers to encourage them to continue their work in their communities since funding has run out and their work is no longer supported. The idea is to involve these women leaders in discussion groups where they reflect on the years they have trained and supported savings groups and to think though how this work can be carried out even more effectively. Then with minimal resources, ongoing meetings, and ongoing exchange between the "geniuses"  they can leverage the capacity of these groups and create new ones that work even better to reach the poorest and more remote areas. 

Jeff Ashe
Carsey School of Public Policy University of New Hampshire


October 4, 2019

By Jeff Ashe

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