Author: Shelagh McLoughlin

Going digital where technology is feared

A recent SaveAct study investigating scope for digitization in rural and peri-urban communities found widespread fear and distrust of technology among members.

Despite the fact that ninety percent of SaveAct’s savings group members own a mobile phone, the majority of them are still very wary of introducing technology into group processes, and this fear will have to be factored into any digital strategy adopted by the organisation.

This was one of the main findings of a study commissioned recently by SaveAct. One of the aims of the research was to assess the need for a mobile application in streamlining groups’ savings activities. The study was undertaken by Lakheni in Margate and Scottburgh in KwaZulu-Natal and a total of 70 participants, representing 32 groups, were engaged with.

The study found that there is significant concern among members about the safety of their money and savings information, to the extent that many groups duplicate this information in a “back-up” exercise book that is kept at an alternative venue.

Mobile phone penetration within groups is high and 90% of participants own at least one mobile phone, while 17% own two or more. However, the majority of participants (63%) are not able to use their phones without assistance, and older members have difficulty seeing what is on the screen. Many of those with feature or smart phones need help with using and updating applications.

And although 97% reported being aware of services accessible through mobile phones such as cash send, airtime transfer and buying electricity, only 8% make use of these services because they do not trust them.

“We have heard of it but people have had airtime disappear, so you can’t trust it,” said one participant.

 Why technology is distrusted

When focus groups were asked to explore possible uses for phones as part of SaveAct groups, some common themes emerged.

  • Although groups recognize a need for an alternative solution to a cash box in keeping money safe, they had misgivings about using technology because of their self-assessed lack of ability to do so.
  • “Evidence” in group activities is very important– the ability to see, touch, and understand everything that happens within the group; and participants were concerned that moving onto any electronic platform would mean that some group processes are “hidden” from the majority. Knowledge and access would be centralised to the few that are tech savvy and some younger members of the groups.

“Not all of us can understand computers, but all of us can understand something that is written down,” said a participant.

  • Groups were concerned about their inner workings being shared with outsiders and had misgivings about using a technological platform for SaveAct activities, because mobile phones are shared resources within households and group secrets could therefore be exposed to non-members.
  • Groups were generally distrustful of technology and shared multiple stories of “disappearing” airtime and data. Anton Krone, SaveAct’s executive director, said corporate practices of mobile network operators and banks tend to contribute to this perception. “Data ‘disappearing’ after 30 days on data arrangements, and money being lopped off bank balances are part of everyday practices that many consumers find hard to bear.

“However, if you do not appreciate these as normal practices, the natural assumption is to conclude that someone is stealing my data or my money. This means that trust is never built between the user and the service provider.”

Members also don’t fully understand how technology works and therefore find it difficult to trust. “I trust writing down. You never know about computers,” said a participant.

  • There was concern that “clever” people who know how technology works might be able to exploit their ignorance and defraud them of their savings. Participants were also worried that having a dedicated mobile phone or computer would attract criminals who would otherwise not bother with their SaveAct books.
  • Members were concerned that the introduction of technology might change group dynamics. Group meetings as they are currently operated are important as a tool for controlling members’ behaviour through reprimands, reminder of obligations and fines. Transparency and broad participation in groups are highly valued and there was concern that technology might exclude many members from full participation.
  • Older members were averse to technology, saying they were “too old” to learn how to use it, although those who had previous positive interactions with technology were more likely to be open to the idea.
  • “We are old, we don’t use our phones, but our books are CLEAN, with no mistakes,” said a participant. Young people, on the other hand, had strong views about moving group processes to tech platforms and were generally more open to the idea of total integration with tech.

 Technology must be introduced in non-threatening way

The authors of the study said any digital strategy for savings groups should take these fears and realities into account and should be scaffolded onto existing SA processes and run in conjunction with the existing system, so that members can experience technology in a safe space.

They warned that there is a risk that technology will be embraced by a few individuals who then take on greater responsibility within groups, thereby centralizing knowledge, power and access.

Krone said despite these concerns, “SaveAct believes it is important to prepare members for digitization, both in terms of enabling them to take advantage of what this can bring them in added value, but also to equip them to negotiate the vagaries of the world, as they become increasingly a target of other service providers, opportunists and scams.”


Beyond the box: how to safeguard savings?


Many savings groups resist banking their money for a variety of reasons, but there are moves to change this

“When we opened the box we found that the money was missing. We went to the box-keeper’s homestead and found the tools that had been used to open it. People were so very angry they wanted to burn her homestead, but I managed to persuade them to go to the police instead.”

Narrator of the story, Phakamile Ntuli, works for a SaveAct partner called Justice and Women (JAW) in Melmoth. She was also a member of the affected savings group but she managed to stay calm despite her anger.

The local induna was called in to mediate after it was found that the box-keeper’s daughter had stolen the money to please her boyfriend. He’d promised to use it to pay lobola and marry her. Instead he disappeared, leaving her family to repair the damage. The girl’s father promised to repay the money, which he did one year later.

Keeping large sums of money safe is one of the most pressing issues confronting savings groups, and a separate session was devoted to it at SaveAct’s annual partner’s meeting held in September. In a recent study commissioned by SaveAct that identified challenges facing savings groups, members pointed to the risk of the box—in which money and savings records are kept—being stolen or lost as their greatest threat. The study was done by Lakheni in Margate and Scottburgh in KwaZulu-Natal and 70 participants representing 32 SaveAct groups were interviewed.

“The box is vulnerable to theft and we’d lose everything. If it’s stolen, it would be over for us,” said one participant. Although members recognised that an alternative system is needed, and SaveAct recommends the use of banks, there is resistance to this because of charges. “The banks eat our money,” is a common refrain.

Banking is also not always an option, anyway, because of inaccessibility. Many groups are in deep rural areas and banks are too far away, while the journey by taxi to the nearest town is expensive and itself potentially dangerous. And so thousands of groups operate by keeping all the savings in a box that is locked with three keys and sent home with a designated keeper.

Although the danger of theft is more acute in the lead up to a group’s annual share-out, the stories told by different organisations at the meeting described a range of calamities that can befall a large sum of cash.

Destroyed by fire

Ntuli told the gathering about a box that was destroyed when the keeper’s house was burnt down. “The box and the money got burnt. The member called us from hospital and told us what happened,” she said.

“Her husband found the box in the ashes and when they opened it they found that the money was burnt. We went to the bank and they helped us.”

The burnt banknotes, representing thousands of rands, were deposited into the box keeper’s personal account and the bank replaced most of it, apart from a few hundred rands’ worth of notes that were damaged beyond recognition.

“Because of the dangers we encourage people to open accounts, but they are very reluctant,” said Jenny Bell from JAW. “It’s getting scary because poverty levels are rising and people are desperate. One woman in a stokvel—not one of our groups—was shot in the Melmoth area. It’s mostly women (who are) looking after boxes in rural areas and it’s mostly young men who are doing these things and are very violent,” she said.

Nomthy Mbonambi, SaveAct’s KZN project co-ordinator and regional co-ordinator for the KZN south coast, said her office shared stories of robberies and that encouraged people to open accounts. “Members want low or no bank charges, but the reality is that it’s better to pay charges than have money stolen. I’m glad we’re moving in that direction,” she said.

Nosipho Ndlela, SaveAct area co-ordinator for Zululand, said not all areas are resistant to having bank accounts. “When I introduced groups in the Eshowe area they all said they would use banks. We don’t have any groups working with a tin.”

Banking challenges

Banking, however, has its own challenges. Members can get complacent and drop their guard to the dangers closer to home. Ndlela described how in Eshowe a group lost R16 000 even though they had an account and believed they were doing things the right way.

At their first share-out they found that there was less money in the account than there was supposed to be. When they examined their records they discovered that the person entrusted with depositing the money each month had not deposited all of it and there were five missing receipts.

“The bank helped us and did a printout of the whole year’s transactions,” said Ndlela. “But the group was so disappointed because the woman who stole the money was the kind of person who always went the extra mile.”

At the partners’ meeting these stories prompted a vigorous discussion about what safety measures could be implemented. Suggestions included opening group accounts, adding new rules to the group constitution when opening an account, compulsory cell phone notifications to at least three members when depositing, keeping details of share-outs confidential, sharing out money in a safe place and, if possible, transferring share-out money electronically into members’ bank accounts.

For some groups finding a solution to the security issue has meant trying different approaches. Mdu Zungu from Thol’Ulwazi Uzivikele, a community development NGO based in Manguzi, described how, after an attempted robbery, people in one of their groups opened a bank account, but when it came to share-out time they withdrew all the money and took it to another venue to distribute to members.

“We said that wasn’t safe, and that next time they should rather do the share-out in the bank, which is what they now do,” he said. Another group opted for electronic payments with cell phone notifications.

One delegate also suggested that groups should align themselves with figures of authority in their areas. Anathi Jindela from Jabulani Rural Health Foundation in Eastern Cape described how when he mobilises in rural areas he uses traditional authorities. “If the chief and his wife want to join a group that’s fine, because it’s less likely that there will be a robbery.”

Wary of technology

Although digitization of the savings process might seem like the safest route to go, the study showed that many members, especially those that are older, are wary of this. One of the briefs of the report was to assess the need for a mobile application in streamlining savings group activities, and members raised concerns about their perceived inability to use and understand new technology.

“As an old person I will never be able to use these things (technology),” said a respondent. Focus group participants were also concerned that moving onto an electronic platform would mean that some group processes are hidden from the majority, with knowledge and access centralised to the few that are tech-savvy and some younger members of the groups.

Anton Krone, executive director of SaveAct, said the lack of access to mobile wallets and places to deposit and retrieve cash is a handicap in South Africa. “In many other countries, including Lesotho and Zimbabwe, mobile wallets or M-Pesa arrangements are in place. In South Africa, stringent regulation has inhibited M-Pesa’s development. We need to ask ourselves whether South Africa is over-regulated, at the expense of the voiceless?”

Krone asked if the poor and excluded are “paying the price for regulations designed for the wealthy or for banks. South Africa needs vigorous debate on these questions. Support for pilots under controlled conditions is essential.”

He said despite the risks the incidence of theft in savings groups is low, due to the relative cohesion and cooperation in these groups, and that the problem is more prevalent in stokvels. This was echoed by participants in the study, 80% of whom were members or had been members of community stokvels in addition to belonging to SaveAct savings groups.

“Systems around pay-outs are not clear and so you never know what is due to you. There is no transparency,” said one interviewee about community stokvels. Another said that “information is kept hidden and only one or two people know what is going on. The rest of the group is in the dark. Things are secretive.”

According to the study, “participants told multiple stories of being disappointed at the end of the year distributions (in stokvels) because they did not receive what they had expected.” Study participants agreed almost unanimously that SaveAct’s model was valuable because it is structured in a way that mitigates against the biggest pitfalls of community stokvel groups.”

Despite the perils that affect both savings groups and stokvels, Krone said these institutions are not about to disappear. “The recent FinScope survey for South Africa shows an upswing in the use of such groups, and their prevalence is set to be a major part of the financial services world for decades to come. Stakeholders need to come together to look for solutions.”


Savings group loan helps farmer dodge effects of climate change

Katrina Schwartz, a small-scale farmer from tiny Leliefontein near the Namibian border, is used to harsh weather conditions. But in this Namaqualand semi-desert, which averages only 200mm of rainfall per annum, she and the other farmers who graze livestock on communal land are battling with the effects of climate change.

Schwartz (52) is married with two sons and has been a farmer for 30 years. She also has a job with Conservation South Africa (CSA) as a supervisor in the National Resource Management project. She has a total of 80 animals — including 30 goats, 42 sheep and eight cattle— that require sustenance but she’s been struggling to provide this, with overgrazing and water shortages a constant problem on the farm she leases from the municipality.

Schwartz says since 2010 there has been a change in the weather patterns and conditions have worsened over the years. “Summer is dryer and the winters are cold with less rainfall than in the past. There is little grazing for our animals. The situation is really concerning because animals die and some farmers lose the only income that they have.”

Thanks to SaveAct she was able to do something about her predicament, and recently moved her animals to new land that will provide better grazing while giving the old area a chance to recuperate. This would not have been possible without access to a loan from the savings group she joined two years ago, when SaveAct formed a partnership with Conservation South Africa and SANBI to help local people build resilience to changing weather. There are now 2 groups in Leliefontein and 10 in Namaqualand altogether.

“The loan made it possible for me to buy fuel for transport, pay the people that helped me move and buy food for them. The farm is 67km from Leliesfontein and they had to stay over for the night,” she says. She’ll pay rent for the new land, which is owned by the government, and her husband and son will take care of the animals.

Without the loan she would have had to resort to borrowing money with crippling repayment conditions. Instead, she’s repaying her savings group at the agreed pace as per their constitution, and the interest goes back into the group.

SaveAct field officer Geniene Nero says before savings groups were introduced to Namaqualand local people were forced to borrow money with very high interest rates, which lead to a cycle of debt and poverty in the region. “ With the SaveAct model they are learning to be financially smart and independent, and poverty is being reduced in the long run,” she says. (Reporting by Geniene Nero)





Why beekeepers are going into partnership with SaveAct

After decades of photographing and participating in social development work, Guy Stubbs has learnt an important lesson—for a project to be successful it’s impossible to do everything on your own.

“Lots of stakeholders are necessary and they must be the right kind. That’s why this partnership with SaveAct is critical,” says Stubbs, who was once a globe-trotting photographer and now calls himself a Christian social entrepreneur.

In 2013 he started a social enterprise called African Honey Bee that promotes advancement through beekeeping and other activities. Operating in Limpopo, Mpumalanga and KwaZulu-Natal, African Honey Bee has trained 1500 families and more than 600 of them are now actively keeping bees. Beekeepers sell their honey to the NGO, which then sells it to consumers via pharmacies. When there is profit, it is shared with the producers.

In September the organisation kick-started a formal collaboration with SaveAct that will see African Honey Bee staff mentored as they help their beekeepers set up savings groups in northern Zululand. Those who came to the meetings were introduced to the savings methodology and about 10 groups of approximately 15 members each have been established. The organisation hopes to build up the number of savings groups to about 20.

Stubbs, who started beekeeping when he was 10, wrote a thesis for his MBA a few years ago on building a model for reducing poverty, based on helping poor rural families produce honey. The model is cleverly structured so that participants select themselves in the first workshop.

“We offer free training in a location,” he explains. “People come and we say we don’t give you anything. You have to make your own equipment. If they stay for the three days of training, where they learn how to make protective clothing and tools from what’s available at home, we give them materials to make a beehive.

“They can go away and start beekeeping. Most of the youth who come expect a handout and when they hear there’s nothing except training, they leave. That’s why the average age of our groups is 25-35 years.”

Participants are taken through a series of workshops where they make their hives and learn about beekeeping, harvesting honey, food safety, how to make a business plan and how to run a business. They’re also taught chicken production, vegetable gardening and how to care for fruit trees. After progressing through six levels they emerge with a certificate and an arsenal of livelihood skills.

Sustainability is key for Stubbs, who says he’s seen many projects fail. Inspired by Bangladeshi economist and Nobel Peace Prize recipient Muhammad Yunus, who pioneered the concepts of microcredit and microfinance, Stubbs says he’s studied the concept of small-scale loans and what makes them work. This brought him to the work of SaveAct.

“Yunus’ model was developed with groups, not individuals. The groups act as banks; this is similar to the stokvel system,” he says. SaveAct’s model takes the stokvel and makes it safer for members by adding rules and processes. For Stubbs, what is especially appealing is that this model has been developed and tested over a number of years with measureable success.

“SaveAct stands out as industry leader in South Africa. It works here, it’s an obvious first-choice partner. We could start savings groups on our own but we could never do it as well as SaveAct, because they focus on that,” he says.

He lists other benefits. “SaveAct is teaching people to manage resources, to be responsible with money, to come to meetings and function as an organisation. They learn how to set up rules for meetings and how to be an efficient and constructive group.”

The monthly meetings of the groups are particularly appealing because they will also provide an opportunity for African Honey Bee to address other peripheral matters, such as the buying and selling of day-old chicks, seeds and vegetables that the beekeeping groups are also involved in. Ultimately, Stubbs believes this will all lead to greater efficiency for the organisation.

One of the main benefits of belonging to a savings group is that the process of saving and the opportunity to borrow money from it leads to members being able to stabilise their household finances and become more resilient during hard times. Their financial security increases and it becomes possible for them to embark on small enterprises that can multiply wealth.

With beekeeping, raising chickens and growing vegetables, African Honey Bee’s groups are already well resourced. In addition, many families also grow trees for Sappi, who then buy them back. A big drawback, however, is that the trees only reach an optimal size after seven years and many growers are forced by circumstances to fell and sell them when they are four years old.

“Belonging to a savings group will mean that members have more income streams, which will make it easier for them to leave their trees to grow for seven years. That means they’ll make 40% more on them,” says Stubbs.

That’s an outcome so sweet even bees might approve of it.


Photo: African Honey Bee


Women prioritise home and family when saving

“In African culture, women are the ones who provide for the household and keep it running. They buy the food and cook it, they make sure there’s enough for everyone. They make sure there’s shelter and clothing.”
That’s Dr Sazile Mtshali speaking, but her view is shared by Nolufefe Nonjeke-Dlanjwa, her colleague at SaveAct, when they’re asked why there is such a high percentage of women members in the savings and credit groups (SCGs) supported by the organisation. Mtshali is the programme co-ordinator in KwaZulu-Natal and Nonjeke-Dlanjwa is programme manager in Eastern Cape.
Although SaveAct doesn’t ignore men or exclude them from joining savings groups, it’s a de facto women’s empowerment organisation, with ninety percent—or 54 900—of its SCG members female.
In the rural areas where SaveAct works, stokvels have traditionally been an important platform used by women striving to provide for their families, and this familiarity has made the SaveAct model, that provides structure and support for saving in groups, an easy fit. The organisation also provides financial literacy training to members, with more recent parallel programmes that promote enterprise training and development added to the mix.
“It’s a very good model, it works,” says Mtshali, who did a PhD on household livelihood security in rural KZN, at Wageningen University in the Netherlands. A rural development veteran, she says what impresses her about the model is that people learn about financial management and have agency in the process.
Since opening its doors in 2007, SCG membership growth has been exponential, reaching 61000 members (men and women) in July. Data collected by SaveAct shows that last year members saved an average of R4334, with a whopping 31% return. The total taken home by women members last year was R238 million.
What they spend their share-outs on confirms their role as keepers of hearth and home. In a recent preliminary survey—undertaken in Matatiele and Underberg—of what members spent their share-out money on last year, home improvement was the top item (42%), with school fees second (22%) and food third (15%).
The availability of loans is also a big plus. Members can borrow money from their groups on more flexible terms than those offered by banks, providing a lifeline that can help to cushion the blow of a family disaster, or make it possible to start a small business.
“For women who suffer a lot of social and economic deprivation and exclusion it becomes very fulfilling to be able to have something that you can do for yourself, once you believe you can and there is a financial platform to cushion you,” says Nonjeke-Dlanjwa. “Those are the testimonies you always get when working with people, particularly women, in savings groups. It’s very common to be asked ‘Nanikade niphi na kwakukudala sihlupheka,’, meaning where have you been (in all) our struggles?”
After her first share-out of R5000 in 2015, fifty-seven-year old Joyce Mboyisa, who lives in rural KwaMavundla near Margate, was able to provide a decent funeral for her daughter when she died. The following year she started building an eight-room house with her second share-out of R6000.
“I feel like my burden has been lifted, because I am able to borrow money when I’m caught up in situations that require it,” says Mboyisa.
Twenty-five-year-old Sanelisiwe Sikobi, also from KwaMavundla, used her savings group to access finance to help her start a construction company. Despite not knowing anything about the building industry, she used her college business and financial management qualification to put together the company. It employs three builders, one of whom is her father, and seven labourers. All ten employees are men, and so far Sikobi Construction has built two houses and worked on two more.
Nonjeke-Dlanjwa says SaveAct’s financial education modules try to open conversations about long-time financial planning, where members look at what they want to achieve in the short, medium or long term. “If the priority for a particular household is food, we start there, looking at how people can meet their basic needs. (These are) small things, like having your own shelter, producing your own vegetables and reducing your vulnerability and the need to buy everything.
“This is where the awakening enterprise module and enterprise development programme fit in, strengthening people’s consumption-smoothing capability, and polishing their production skills so that they can start operating small enterprises that contribute to increasing household income. Once people gain confidence in their abilities, they prioritise investing in these enterprises, and by that, sustaining their livelihoods. And so SaveAct’s vision becomes a reality for that individual.”
Nonjeke-Dlanjwa has been with SaveAct since the early days, and describes her background before that as “heath promotion and training for transformation”.
“I am always amazed by how what I do now relates to my long-lived passion for positive living and helping ordinary citizens to believe in their efforts to make their lives better. (There is an) increased sense of agency once people get to savings groups,” she says.
“What I appreciate about what we do at SaveAct is that we are providing an opportunity for someone who wants to do something better for themself, to begin to dream and take tiny steps to live that dream. That for me is the key to people’s empowerment and their own development.”
• Additional reporting by Londiwe Mtanda and Nomthy Mbonambi. Photo by RECIPROCITY