Three-year EU grant set to boost SaveAct reach and impact

SaveAct is set to reach an anticipated 18,000 new savings and credit group members in the next three years following a recent grant from the European Union, which will significantly expand the organisation’s impact across three of South Africa’s provinces.

The new EU-funded project, to be known as Masongeni, sandise ingeniso (“Let’s come and save and increase our income” in English), will not only support SaveAct’s existing work in KwaZulu-Natal, the Free State and the Eastern Cape, but facilitate the establishment of new savings and credit groups in the Eastern Cape, specifically the relatively remote areas of Bizana and Mt Ayliff, according to SaveAct's Silvia Storchi.

eu flag yellow low“The main scope of the project is to expand SaveAct's reach into rural areas. Through the EU funding, SaveAct will be able to continue supporting communities, plus expand into new communities in new rural areas which have expressed demand in the savings methodology,” she said.

According to Eastern Cape Programme Coordinator Nolufefe Nonjeke-Dlanjwa, the EU-funds are a cause for real celebration. “The Eastern Cape contains within it some of the poorest communities, many of whom are also living in the most remote parts of the country. This funding means we can bring a new way of saving and managing finances to thousands of people who do not have access to either financial education or banking services. It’s something to celebrate,” she said.

Establishment of SaveAct-facilitated groups in the Eastern Cape will begin with community mobilisation to find an “entry point” into communities, said Storchi. This could be through a partner in the form of an existing non-governmental organisation operating in the area.

The project is set to run over three years and covers all three “pillars” of the SaveAct model: savings group promotion; financial education and enterprise development. By the end of the three-year grant period, SaveAct aims to graduate 40% of the new savings groups created during the period.

“This means that the groups will have gone through and completed the 18-month schedule of training and supervision provided by SaveAct and will have successfully passed the ‘group health assessment’ which is used to evaluate the group's performance and whether it is able to operate on their own,” said Storchi. “This reflects the fact that SaveAct ultimately wants to create a system in rural areas which is sustainable and that people can use independently to better manage their money.”

The third pillar, enterprise development, will be focused on the training and support of farmers grouped around common commodity interests (CIGs). It is anticipated that this training – imparting both agricultural and business skills – will reach about 600 farmers and will be jointly implemented in the Eastern Cape by SaveAct and its partner organisation Ubunye, based in Grahamstown. Ubunye director Lucy O'Keefe said Ubunye was proud to be working in partnership with SaveAct to increase financial resilience in rural communities. The grant represented an opportunity to strengthen livelihoods and enterprise development initiatives, she said.

"Since adopting the innovative savings and credit group model, Ubunye has been inundated with requests from communities who have heard about the concept through word of mouth from neighbouring villages. The new EU grant will enable us to work with SaveAct to respond to these requests and we are particularly excited about the opportunity to strengthen our livelihoods and enterprise development initiatives,” said O'Keefe.

An official launch of the project is expected later this year.

SaveAct director Anton Krone described the EU grant as a “significant boost to the work of the organisation and an endorsement of its achievements” over the last 10 years. "SaveAct’s savings group methodology is being recognised as a relevant and effective way of addressing the needs of the poor in South Africa. We are excited to be further rolling out our ‘embedded financial education’ developed in partnership with PlaNet Finance. Given levels of indebtedness in South Africa and the prevalence of predatory lending, this aspect of our programme brings critical life skills to predominantly rural women, who such lenders tend to prey upon."

“This funding will assist us in consolidating our work in existing areas and, importantly, provide us with the resources we need to increase our reach, particularly in remote areas where there is high demand for SaveAct-facilitated groups and services. In this way, we are confident of continuing to make a contribution to providing workable and affordable financial services for rural communities, and giving them an opportunity to build sustainable livelihoods,” said Krone.

- July 2015.