Curious Shraddha

What does ‘work Shraddha’ do?

on June 16, 2013

Like the Inamdar men in my family, I will start my response to that question with what will seem wayyyy  off-base, but will actually lead to a concise conclusion, I promise. Here we go!

Among the international partners Coady works with is CARE International; it is one of the pioneering organizations that focused on fighting hunger. Over the years, CARE has grown to work on plethora of development projects, including combating poverty, gender empowerment, and access to financial services. In 2008, CARE officially launched the Access Africa program. With aim to promote equal access to financial services for marginalized groups, this program’s impact goes beyond just financial empowerment, as its indirect and long-term impact also includes social and economic empowerment.

Through the Coady’s Youth in Partnership (YIP) program, I was brought on as an Associate for Access Africa -Tanzania. The program has been successful in numerous communities across Africa in having people come together in small groups and form village savings and loan associations (VSLAs). For those of you who may not know much about this concept, VSLAs are basically self-selected groups of people who pool their savings, rotate the accumulated funds within the people in the group, and also give out loans using the funds to its members. Because the group is relatively small and is self-selected, there is a high degree of trust and understanding amongst  the members. Thus, qualification for the loans (and associated terms & conditions) are all agreed upon by the members. Access Africa continues its efforts to further such grassroots initiatives in more communities.

As great as VSLAs are, there are some obvious limitations to this way of managing one’s finances. The biggest one that comes to mind is  safety- keeping a lot of hard cash in the house has its risks. There is also the issue of limited credit availability– what if multiple people in the groups require a loan at the same time? Of course, the group can only give out what its gathered, thus it may be difficult to disburse the funds if members may be in urgent need of money simultaneously.

CARE works diligently to address such issues. One cool tool (heheh) that is used in Tanzania is Pesa (versions of this technology are used all over Africa). Cell phones are widely used by people here, regardless of whether they are in the city or in the villages. So major cell phone providers such as Vodacom and Tigo have put forth this Pesa tool which allows users to put money on any SIM card (their own or a friend’s or a family member’s) which could be withdrawn later using a password. This, in theory, can make it easy for people to safely store their money on their phone accounts instead of keeping hard cash in their own homes. And unlike banks, Pesa is available to everyone without any pre-determined qualifying factors. One of the things CARE focuses on in Tanzania is to increase awareness of the credibility such services so that more people in the villages feel comfortable using technology to keep their money safe.

To address the issue of limited credit availability, CARE is now working on mobilizing VSLAs and forming linkages to formal financial institutions. This, obviously, has its own set of challenges which need to be addressed. Assuring VSLAs are in fact in the position to handle loans and savings products offered by formal banks, seeing how banks can benefit from these financial linkages, promoting within banks the sensitivities that go along with serving marginalized communities, and providing VSLAs tools to manage their finances post-linkage are just a few of the many matters that need to be attended to.

So now that I have given you the theoretical background of this development initiative, you can hopefully appreciate when I make the all-encompassing statement of my job description, which is that- given the matters which need to be addressed, all ‘work Shraddha’ will be doing is assessing if these linkages make business sense for the banks. 

Tina Fey giving herself high five Liz Lemon Gives Herself a High Five

Awesome, right???  I know!


One response to “What does ‘work Shraddha’ do?

  1. Sanjiv says:

    Something similar to Credit Co-operatives in India and Gramin Banks in Bagladesh.

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