Tag: savings

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.”


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