Promoting Inclusive Markets and Financial Systems
The MasterCard Foundation works with visionary organizations to provide greater access to education, skills training and financial services for people living in poverty, primarily in Africa. As one of the largest private foundations its work is guided by its mission to advance learning and promote financial inclusion to create an inclusive and equitable world. Based in Toronto, Canada, its independence was established by Mastercard when the Foundation was created in 2006. For more information and to sign up for the Foundation’s newsletter, please visit www.mastercardfdn.org. Follow the Foundation at @MastercardFdn on Twitter.
Access to capital is one of the barriers for pro-poor economic growth, livelyhood enhancement, equitable share of resources and service and gender equality. SAFI project introduced the VSL methodology to address these challenges faced by the vulnerable, poor, very poor and destitute population in Rwanda. These groups of people are generally considered to be un-bankable by formal financial institutions since they lack security in the form of property or capital for the loans.
This report aims to understand the client targeting methods employed by the SAFI project and the extent to which inclusion was achieved in the context of Rwanda. It is also a critical analysis into why low savings and loans are registered by the SAFI/CARE Rwanda groups as compared to other CARE VSLA implementation countries with recommendations on how to improve the savings and borrowing capacities of VSLA members.
As a result of the assessment, it was noticed that SAFI project has been successful in reaching the poorest in the villages it operates. The initial process of poverty targeting was very systematic, but it gave way to the scale up strategy which used the knowledge of agents based in the villages to reach the poorest. This method was not very systematic.
VSLA methodology has had a profound impact on the life of its poorest clients. The three stories from the many successful stories we heard during our interactions with the groups. Despite the few challenges faced by the clients, they are very appreciative of the methodology and can see the difference it has made in their lives.
Finally, because of SAFI project poverty targeting in addition to other reasons, its savings and loan rates have been low. However, as the clients gain more confidence and capacity, the saving and loan have continued to increase and it is just a matter of time before these rates become comparable to the rates across other CARE VSLA implementing countries.