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By Rachel Wolff
Through a new US$3 million grant from the Bill and Melinda Gates Foundation, World Vision plans to provide more than 250,000 rural farmers and the poor in Ethiopia a chance to open their first savings accounts.
The three-year programme will help meet what the humanitarian group says is a demand among Ethiopia’s poor to bank small savings of cash to cushion their families from financial setbacks.
The Access to Rural Savings project will begin by piloting savings accounts to between 22,000 and 54,000 people in the first year, in 10 locations where World Vision’s affiliate microfinance institution, WISDOM, has an active branch.
Savings officers, using personal digital assistants (PDAs) and travelling by motorbikes, will be able to record client transactions and print receipts in communities surrounding the branch office.
As the project expands, mobile banking units carrying laptop computers, PDAs, a teller and a savings officer will visit small towns and villages on market days to expand the amount of transactions that can be done within a 50 mile radius of branch offices.
Eventually, four different savings products will be offered in 30 branch locations, including a child savings account for thousands of children who live in the agency’s development project areas.
“For small farmers, who come into most of their cash at harvest time, a savings account would mean less chance of theft or poor use of the funds by family members,” said Worku Tsega, Chief Executive Officer of WISDOM.
WISDOM plans to utilise the capital generated by the new savings accounts to expand its microfinance programme in Ethiopia. It is currently serving some 54,400 loan clients, the majority being women. Experts estimate that less than ten percent of the demand for microfinance is currently being met in Ethiopia.
World Vision’s microfinance programmes through VisionFund International’s network of 42 microfinance institutions help families increase their household income and assets through access to a wide range of services, including credit, savings and insurance. In 2009, VisionFund disbursed loans to more than 680,000 small loan borrowers from around the world.
The new Ethiopia programme will provide a template for scaling up savings services in other World Vision offices in Africa and beyond.
"VisionFund International aims to transform at least seven of its affiliates into deposit-taking institutions within five years, potentially reaching four million new clients with savings services," said Anthony Storrow, VisionFund International's regional business development manager.
For more information about World Vision’s work in microfinance through VisionFund International, the microfinance subsidiary of World Vision, please visit: www.visionfundinternational.org.
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