The Importance of Savings for Microfinance

Hi everyone, this is Jeff Rutt- if you're interested in how HOPE works by providing both loan AND savings programs for those less fortunate, please enjoy.

Imagine a world in which you paid the bank to hold your money… Perhaps worse, imagine being forced to hide your life savings under your mattress, without a lock or even a door to protect that which is needed to give your family a better life. Welcome to a world without savings- a world without the simplest of institutions allowing men and women the opportunity to responsibly store and save their earnings for tomorrow. While it is a world we can scarcely imagine, it is nevertheless a grave reality for millions around the globe every day. At HOPE International, we recognize the necessity of not only offering diverse and effective loan products to our clients, but complimenting the ability to borrow with the opportunity to save as well. While loans are critical to furthering economic development through providing the capital to help small businesses grow, perhaps nothing catalyzes financial and therefore social change like the impact of saving. HOPE International partners with communities to create Saving Circles; groups of men and women bound in solidarity coming together to consolidate and protect savings. It’s extraordinary to witness the solidarity and determination exhibited by members. Previously, members were often subject to gross mistreatment as they sought to bring themselves and their families out of poverty- while loan-sharks have become part of our vernacular, we often forget that savings-sharks are equally dangerous and sometimes as prevalent. Imagine investing one-hundred dollars throughout a year but only receiving fifty upon your return… welcome to the sad state of living without a bank or financial institution, controlled by those that prey on the powerless. And yet people continue to participate, simply because they are desperate to save for their families, no matter how little the percentage return. Therefore, HOPE International partners with local churches and communities in the form of Savings Circles, an incredibly effective tool for rebuilding dignity and fostering development. Members of the Circle join together to create their own “bank”- while the specifics vary by country and culture, member’s pool savings and offer loans to other members, allowing access to the lump sum of capital needed to weather an emergency or help a business grow. All the policies and funds are provided by the individual members; HOPE simply assists in the education and maintenance of the group. This means that Saving Circles reflect the same Christ-centered philosophy of servanthood that HOPE has always represented- the preservation of dignity for every man, woman and child created in the image of God. 

Thanks for taking the time to read, 

-Jeff Rutt