Saving Schemes Serving as a Platform for Marginalized Group’s Growth
Story by Gloria Kantengwa, Challenges Rwanda Junior Associate
When people are provided opportunities to save safely and invest wisely, real economic development can occur. To celebrate World Saving Day in October last year (2020), we provided training and engaged saving schemes in Kopakama Coffee Cooperative, a cooperative under the Challenges Rwanda’s Coffee Market Building for People and Prosperity Project (CoPP). This training was a moment for the women leading their respective groups to reflect on how far they have come since starting the saving schemes. These savings have enabled them to make short and long-term investments, provide for their family health insurance, and pay school fees for children.
The efforts made by Challenges Rwanda’s project back national efforts. In 2019, the government of Rwanda introduced a saving scheme called “Ejo Heza” that was targeting 90% of the population who were not saving for their retirement (EJo Heza, n.d.). Ever since, lower institutions such as sectors and cells have been sensitizing people to save for their pension. These institutions are targeting saving schemes existing in these communities to include saving for retirement as part of their plan. For farmers to be able to save for the short and long term, it is crucial to build the capacity of saving schemes in terms of having the knowledge and necessary resources to invest and manage their resources. It is in this line that Challenges Rwanda started working with saving schemes in 8 coffee cooperatives and contributed to the initiation of new saving schemes. Today, there are 134 saving schemes existing in these communities that Challenges Rwanda is working with, of which 80% are women-led saving schemes.
Since beginning our work with the savings groups, Challenges has supported the development of improved laws and procedures governing the groups, bringing increased security, and facilitated the groups to think about meaningful investments of their finance to multiply returns. When included with growing their own coffee, which also boosts their contributions to the funds, we see an increase of involvement in economic activity. Ultimately, we hope this can contribute to closing the gap in financial inequality.
In addition, saving schemes have helped to increase the number of people working with financial institutions. Saving schemes have bank accounts in SACCOs and started requesting loans for their group projects. “SACCOs are Savings and Credit Cooperatives (Umurenge SACCOs) established in 2008 to boost up rural savings and provide Rwandans with loans to improve their earnings and enhance their livelihoods” (Rwanda Cooperative Agency, n.d.). It is on that note that members also opened accounts in SACCOs hence requesting personal loans and having personal savings. This would not have been possible without existing structures for coffee farmers such as cooperatives’ leadership and management team that follow up daily.
Finally, saving schemes are helping elderly farmers have a form of retirement cushion. Most of the savings schemes’ members are older people who tend to be the majority of coffee cooperative members. Those elder members started coffee farming back in the 1980’s when this was a popular crop that helped farmers to earn more income than other cash crops. Most members have however, not saved enough to retire in comfort. Saving schemes are helping older people including elderly women to save for their pension through Ejo Heza Program (meaning Bright Future). This government initiative is a defined contribution scheme. It allows everyone, and in this case, the farmers, the opportunity to decide how much they want to contribute. It is also flexible in terms of how frequent the person wants to contribute, either, daily, weekly, monthly, quarterly, or annually.
We know that saving schemes bring people to work together, provide loans amongst themselves, and collaborate on bigger projects/initiatives. We have seen an increase in the number of women saving schemes, elderly pension saving, and engagement with other established banking systems for both saving and loan purposes. This will undoubtedly improve the economic well-being of coffee cooperative members, and encourage greater economic equity for women. With this progress in mind, it is crucial to note that there is a need for future projects to emphasize on developing youth saving schemes within coffee cooperatives as a way to attract more youth and motivate the younger generation to consider the benefits and opportunities of improved financial management.
