According to the World Bank’s Global Findex report, less than half of adults saved or set aside any money in the last year. Without savings, it is nearly impossible to invest in an education, start a business, prepare for emergencies or even just plan for a future purchase. This makes it difficult for those people—the majority of whom live in poverty—to take any action to improve their lives. For this reason, World Savings Day was created almost a century ago as a way to increase public awareness of the importance of savings.
At FINCA, we know that having a safe and convenient way to save makes a world of difference to people living in poverty. That’s why we are working to expand access to savings accounts. Not only does a savings account help you plan for the future, but also by putting the money in a bank rather than keeping it under a mattress, there is less chance of money being lost or stolen.
This World Savings Day, learn about some of the new and innovative ways FINCA is helping people access safe and convenient ways to save.
In Uganda, FINCA International’s BrightLife program has developed a savings initiative called Prosper. Through Prosper, clients use pay-as-you-go financing to buy a solar home system. Clients pay off this loan over time through small payments, building their credit history in the process. Once all the payments are completed, Prosper clients qualify for a 20 percent rebate. They can use this rebate to open a savings account with FINCA Uganda.
Their new savings account combined with their new credit history also makes them eligible for a loan from FINCA Uganda. With access to credit, our clients can then begin investing in different things—like their own education or starting a business—to help achieve their personal aspirations.
With the rise in mobile phones in Africa, FINCA has been expanding financial inclusion through mobile banking. Two recent examples include the launch of CLICK in DR Congo and HaloYako in Tanzania. CLICK users can open an account, manage their balance, make transfers and receive payments all from within the mobile platform. Similarly, HaloYako users can create a free account through which they can save money to their mobile wallet and set savings targets. And as they meet their savings goals, they can even earn free airtime from Halotel, the mobile network operator who partnered with FINCA Microfinance Bank (FINCA Tanzania) to develop and implement HaloYako.
These types of mobile banking solutions enable more people to access life-improving financial services.
Thanks to a joint effort between FINCA Zambia and Good Nature Agro (GNA), farmers in rural Zambia now have access to savings accounts. Previously, GNA paid its farmers in cash as many live too far from formal banking institutions to access any funds paid electronically. However, with FINCA Zambia’s digital banking technology and agent network, GNA is now able to pay these rural farmers electronically.
With each partner bringing a necessary component—GNA’s network of rural farmers and FINCA Zambia’s formal banking structure—thousands of rural families now have the possibility of accessing formal savings and becoming banked.
Despite offering so many new and innovative products, FINCA also understands the importance of constant innovation and improvement. We do this by gathering feedback on how clients are using our products and how we can improve them to better suit our clients’ needs.
For example, right now we’re working with the World Savings and Retail Banking Institute to better understand the savings needs of low-income clients in Uganda. The collaboration will assess the impact of a variety of product features on the usage of savings accounts by FINCA clients. The type of research will help FINCA adapt its products and messaging to client needs and improve financial inclusion outcomes. In the words of FINCA International’s Director of Customer Research and Field Data Services, Scott Graham:
This partnership will enable us to understand some of the most important barriers to savings account usage. By fully grasping, for example, how financial education drives savings mobilization, financial service providers can better adapt products and messaging to client needs and improve financial inclusion outcomes, especially among youth.