UNCDF and UNDP jointly organized a two-day exposure training and field trip in June 2017 for 30 members of the technical committee on financial inclusion in Ghana.

The goal? To enable them to learn about savings groups (SGs), their methodologies and their importance to financial inclusion in Ghana. The Technical Committee on Financial Inclusion is a government body comprising senior staff at the Ministry of Finance, Bank of Ghana, GHAMFIN and all national financial regulatory bodies (National Pensions and Regulatory Authority, Securities and Exchange Commission, National Insurance Commission). It makes decisions concerning financial inclusion in Ghana and is also responsible for designing Ghana’s national financial inclusion strategy.

Training participants were drawn from the Ministry of Finance (MOF), Bank of Ghana (BOG), National Insurance Commission (NIC), Securities and Exchange Commission (SEC), National Pensions and Regulatory Authority (NPRA), Ghana Microfinance Institutions Network (GHAMFIN), Zeepay (a private sector company specializing in remittances), National Board for Small Scale Industries (NBSSI), Microfin Rural Bank and UNDP.

The training was co-facilitated by Noel da’Cruz (UNCDF) and Ishmael Okyere (Microfin Rural Bank). The first day’s topic was on the origin and growth of informal savings groups, their methodologies, technological innovations around savings groups such as e-recording, the impact that savings groups have on development particularly women’s economic empowerment, and their contribution to national financial inclusion. During the second day, a site visit to four savings groups was organized. SGs that are linked to formal financial institutions as well as non-linked were included in the visit.

During the field visit, participants were amazed by the fact that rural people are able to contribute GHC 25.00 per week (USD 5.60) continuously for one year and can access loans to the tune of GHC 4,000.00 (USD 950) every quarter. Participants appreciated the discipline and level of social cohesion among the SG members.

At the end of the two days, all participants agreed that SGs provide an easy and flexible method of financial access for those in rural areas. By leveraging innovations around technological tools and by adopting commercially led linkage business models, the SG model can be made sustainable and scalable. This includes adding insurance, pensions and long-term investments to the methodology, so that SG members can save towards their old age and benefit from pensions just as any worker in the formal sector. It was, therefore, decided that the government should find ways of supporting SGs without tampering with existing methodology.

Participants agreed on the following immediate steps to ensure the recognition and support for SGs:

1. The Technical Committee on Financial Inclusion should ensure that SGs are included in the national strategy.
2. An apex of SGs could be setup so that they can self-regulate themselves and have further recognition and benefit from government’s support. A study will be completed to analyze the modalities of the apex.
3. The technical committee on financial inclusion should work out a system to include investments, insurance, mobile money, pensions and use of technology as part of the model.
4. A write-up on SGs will be presented to the Minister of Finance through the Director of Financial Sector Division (FSD). Staff from the FSD have tasked to work on this with support from UNDP and UNCDF.
5. A presentation will be made to all regulatory bodies on SGs.
6. A video documentary on SGs will be produced with support from UNDP, UNCDF and other NGOs promoting SGs to serve as publicity material.

In conclusion, the workshop opened the eyes of industry and government players regarding Ghana’s financial inclusion efforts and the importance of SGs to the national economy. Participants have now come to recognize the difference between theory and practice. They need to test their assumptions about savers and must consult them before designing programs that will affect them.

There has also been high acceptance and appreciation for the SGs to the extent that participants have expressed commitment to the cause of SGs. It was agreed at the workshop that the national financial inclusion strategy will not be finalized until SGs are included in the document.

This workshop was organized in response to a request made by MOF when UNCDF proposed the inclusion of SGs in Ghana’s national financial inclusion strategy, currently under development. This useful training can be replicated in other countries by UNCDF to promote financial inclusion.

By Noel da’Cruz, UNCDF

About MicroLead

MicroLead is a UNCDF-managed global initiative challenging regulated FSPs to develop and roll-out deposit services which respond to the rural vacuum of services. With the generous support of the Bill & Melinda Gates Foundation, The MasterCard Foundation and the LIFT Fund in Myanmar, MicroLead works with a variety of FSPs and technical service providers to reach rural markets, particularly women, with demand-driven, responsibly priced products offered via alternative delivery channels such as rural agents, mobile phones, roving agents, point of sales devices and group linkages. This is combined with financial education, so customers not only have access but can effectively use quality services.

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