Aid group plans to reach 250,000 new savers via mobile banking units, agents with PDAsJanuary 13, 2010, Seattle
—Through a new $3 million grant from the Bill & Melinda Gates Foundation
, World Vision plans to provide more than 250,000 rural farmers and hardworking poor in Ethiopia a chance to open their first savings accounts. The three-year program
will help meet what the humanitarian group says is a pent-up demand among Ethiopia’s poor to bank small savings of cash to cushion their families from financial setbacks.
“We’re reminded in this recession how vulnerable American families can be without a savings cushion,” said Richard Stearns, World Vision’s U.S. president. “Imagine a couple in rural Ethiopia who has a bad harvest or learns their child is sick. For them, even small savings can make the difference for surviving that lean year or responding to that family emergency.”
The Access to Rural Savings in Ethiopia project will begin by piloting savings accounts to between 22,000 and 54,000 people in the first year, in 10 locations where World Vision’s affiliate microfinance institution, WISDOM, has an active branch. Savings officers, using personal digital assistants (PDAs) and traveling by motorbike, will be able to record client transactions and print receipts in communities surrounding the branch office.
As the project expands, mobile banking units carrying laptop computers, PDAs, a teller and a savings officer will visit small towns and villages on market days to expand the amount of transactions that can be done within a 50 mile radius of branch offices. Eventually, four different savings products will be offered in 30 branch locations, including a child savings account for thousands of children who live in the agency’s development project areas.
“We are operating in rural areas where ‘savings’ has meant extra livestock or grain a farmer has been able to store up, or a bit of cash a mother hides in her house,” said Worku Tsega, CEO of WISDOM.
“This program creates a valuable alternative for our loan clients and other poor families to put away a cash cushion safely and cost effectively. For small farmers, who come into most of their cash at harvest time, a savings account would mean less chance of theft or poor use of the funds by family members,” Tsega added.
WISDOM plans to utilize the capital generated by the new savings accounts to expand its microfinance program in Ethiopia, currently serving some 55,700 poor loan clients, most of them women. Experts estimate that less than 10 percent of the demand for microfinance is currently being met in Ethiopia, a country where the majority of the population lives on less than $2 a day.
World Vision’s microfinance programs help families increase their household income and assets through access to a wide range of services, including credit, savings and insurance. In 2009, the aid group’s microfinance subsidiary, VisionFund International
, disbursed more than 680,000 small loans to women and men in every region of the world through their network of 43 affiliated microfinance institutions. World Vision’s affiliate microfinance institution in Ethiopia currently reaches some 56,300 poor entrepreneurs—66 percent of them women—with loans averaging $187.
"This new program will provide a template for scaling up savings services in other World Vision affiliated microfinance institutions throughout Africa and beyond," said Anthony Storrow, VisionFund International's regional business development manager, who is providing technical support for the project. "VisionFund International aims to transform at least seven of its affiliates into deposit-taking institutions within five years, potentially reaching four million new clients with savings services," he said.
This grant to World Vision is part of the foundation’s Financial Services for the Poor initiative, which is working with a wide range of public and private partners to harness technology and innovation to bring quality, affordable savings accounts and other financial services to the doorsteps of the poor in the developing world. The foundation believes that setting aside small sums in a safe place allows people to guard against risks, build assets, and provide opportunities for the next generation.
World Vision is a Christian relief and development organization dedicated to helping children and their communities worldwide reach their full potential by tackling the causes of poverty. We serve the world’s poor --regardless of a person’s religion, race, ethnicity, or gender. For more information, please visit www.worldvision.org/press.