Along Tajikistan’s border with Afghanistan, community-based savings groups (CBSGs) are helping transform local economies by providing access to these crucial financial services. Groups typically convene around 20 community members on a bi-weekly basis to pool their own funds for use to save and borrow. Since their introduction in Tajikistan by the Aga Khan Foundation in 2009, CBSGs have had an impressive impact—providing communities with critical financial skills while working to reduce poverty.
A LOCAL APPROACH
Established in 2015, the savings group in Ganj, a village in the Khatlon region of Tajikistan, boasts 40 members—35 of them female. Today, they are in their fourth cycle of activity, having blossomed from a small group of only 17 members. The group has accumulated over $4,000 in savings, with the value of loans increasing significantly over the last year. The progress has given many members the confidence to explore small business ventures, speak up more in the home, and put trust in the savings group model. Most of all, members—the majority of them housewives—appreciate the supportive network that the group has created.
“Before, when we were not meeting as a group, we didn’t discuss our ideas,” one member says. “But now, we have a unique place where we can talk to each other about ideas, about starting our own businesses. Our heart is warm—knowing that we have support and savings here.”
Members describe the groups as a network of people who look out for one another, helping each other cover emergency costs and other pressing needs. For one member, that need was to provide for her son’s education: “I have a son who is studying at the university, and just to pay for his study, I needed a loan. I did not go to any of my relatives to ask for cash. I did not go to the bank… I just came here and addressed my problem with our group, and we solved it and I took a loan. And after 3 months, I paid it back.”
Savings groups build strong trust among the community. One member puts it simply: “We couldn’t do this without trust.” The ability of the groups to create this trusting atmosphere is in its accountability framework.
Accountability is built into the structure of how the group collects and stores funds. Shares and dues collected from all members—including a “social fund” that provides for emergencies—are kept in a lockbox. Three group officers (leader, treasurer, and secretary) are given keys to the lockbox. All three keys are needed to open it.
Together with discussions about local priorities, savings groups create a spirit of trust within the community and a platform for economic empowerment.
Overcoming Financial Barriers for Women
Women in Tajikistan face barriers to economic opportunities, especially in rural areas. Savings groups address this by improving members’ financial literacy and access to—and control over—financial resources.
Like in other villages, female residents of Guliston, also in Khatlon, found that formal financial institutions like banks were often unable to address the needs of their households due to high interest rates, long wait times, and limited access. Therefore, the community established a savings group comprised almost entirely of women—with only a single male member.