Savings groups form the basis of collective action in urban poor communities. The establishment of community savings is a core ritual of the urban poor federation building process, and the central participation of women in community savings significantly improves the quality of the process and the probability of sustainable change. Community savings schemes help meet the needs of low-income urban dwellers and create the foundation for building urban poor federations that provide their savers with more influence and scope for action.
By being members of small daily savings groups, women with the lowest and least stable incomes are able to create a consolidated voice to help bring about the changes they seek in their city. They also realize their capacity to influence and change the nature of leadership from individual to collective, within and between communities, and thus effect even greater change. This is the essence of the federation-building model in SDI: it is by addressing the needs and aspirations of the city’s poorest women that the rest of the community begins to see meaning in coming together.
Sheila Magare of the Zimbabwe Homeless People’s Federation recounts the effects of community savings in her life and her community:
“…I started getting small loans as well from the group to improve my vending business and I repaid the loans. I then joined other members of the group and got a big loan and we started a collective business of buying and selling snacks from our vegetable markets. This was a huge success and we never looked back. The profits from the business we used to buy building materials for houses even though we were landless. We used our savings booklets as evidence of the capacity of the poor to save and to collectively build their own houses. Armed with our savings records we engaged the City of Harare to allocate us land to build houses. The officials were surprised by how much we had saved. We earned their respect. In turn they changed their conditions for registering on the Municipal waiting list for accommodation… Even though it took us 5 years the City eventually allocated us land to build houses.
Using the same method we started talking to national government ministers as well. Our message was simple – that we were slum dwellers but we were not hopeless. We wanted government to change the policies that make it difficult for the poor to live decently in towns. We wanted the government to give us money to add to our savings. That way more poor people can have decent homes and safe water to drink and proper toilets. Mayors and government ministers in Zimbabwe now know me by name because, with other federation leaders we never get tired of fighting for other poor families.”
In addition to community savings, members of many savings groups also save towards a national fund. This is a fund that is used to leverage the savings of the urban poor to support larger investments in slum upgrading. As savings groups come together (or “federate”) at the settlement, city and national level, they begin to look beyond the needs of their savings group alone to the needs of the federation and the urban poor at large. In the same way, committees found at the level of the local savings group are replicated at network, regional, and national levels. This enables the generation of a self-governing national movement that is rooted in the hopes, aspirations, and challenges of its members.
Both functions reinforce each other. The savings and loans systems at the group level prepare communities for much bigger loans and project management demands when upgrading is undertaken. Federation savings groups see savings as uniting the community and building collective capacity to address larger issues with a wider impact beyond a particular group. Traditional savings associations work to the benefit of the members of the group. Within the federations, however, savings groups serve as building blocks for community institutions that in turn enable them to address and invest resources in issues that affect the entire community or city, stretching beyond those of livelihoods alone.
The development of the city-level federation is inextricably linked to the federating of the savings groups. The city-level federation grows out of the networking and institutional structures that arise from the coming together of savings groups in the same settlement or network, regional, and national level. In Uganda, this process started in Kampala and Jinja regions, and then spread to other areas through community learning exchanges.
Leaders groomed at the saving group level that demonstrate their capacity and dedication have the opportunity to rise to positions of leadership at higher levels, where they can provide mentoring to the citywide agenda that is firmly rooted in the ideals of the savings groups. In this way, the voices of the poor are taken from savings group level meetings to network-level meetings, and from there are able to inform the city agenda. Thus, the city federation is driven from the bottom, not the top. Network, regional and national level meetings are critical to maintaining this bottom-driven process. These, rather than projects, are what make the savings groups feel part of a larger process, a larger agenda, a movement.
One example of this is in Jinja, Uganda, where there are 42 savings groups across the city. These savings groups come together as six networks, each network having eight program facilitators – 60% of whom are women. The program facilitators (for issue-based committees on evictions, health, loaning, auditing, etc.) come together to form the regional council. The regional council provides a space where representatives of the savings groups are able to come together to plan and strategize. Facilitators are chosen for the capacity and accountability they have demonstrated in their savings groups. Five representatives from the Regional Council – three of whom are women – sit on the National Executive Council – the space for national planning rooted in the struggles and ideals of the savings groups.
Check out SDI’s 2012 / 2013 Annual Report to read more about how community savings impacts urban change through organized communities and strong women leadership.