Community Led Financial Inclusion in Burundi

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Community Led Financial Inclusion in Burundi

Vienna, United StatesBujumbura, Muyinga, Gitega, Makamba, Matana, and Buye, Burundi
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
Established
Budget: 
$50,000 - $100,000
Website:
https://www.fivetalents.org
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Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

We improve access to financial services for marginalized communities through a community-led approach. This helps build stronger and more empowered communities

About Project

Problem: What problem is this project trying to address?

Many communities in rural Burundi live in extreme poverty and lack access to financial services. About 89% of Burundi’s population live in rural areas, and the United Nations Human Development Index ranks it at 185 out of 187 countries, making it one of the poorest in the world. With a lack of access to formal banking institutions and low literacy and education rates, this largely excluded population is in need of community-led training and savings programs to create sustainable, long term solutions to poverty in the country.

Solution: What is the proposed solution? Please be specific!

We are working with locally-led literacy circles and graduating them into community savings and credit groups. We are doing this in a way that builds upon the strengths of the existing literacy groups and enhances them with financial literacy and business training. The groups who have learned to read and write work together to decide on the policies and procedures of the group and save and lend together. The groups also learn business skills in the process. With 92% of rural households owning land and practicing farming, this solution provides a great business opportunity for communities.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

A Burundian woman learns to read and write in a local group. After 12 months, she learns to understand numbers through our financial literacy scheme. Then she starts to save with her group. Her confidence grows. Before long she can borrow money from the group for her agricultural work. The business training helps her to see her plot of farmland as a business, not just a means of subsistence. Her life has been transformed. She trusts the group and appreciates the local facilitators who have guided the group through the process. These local facilitators were trained by our team. The facilitators learned how to establish a savings and credit group and how to teach basic business skills, passing this knowledge on to the group members. Over time, the groups become self-sustaining and their businesses flourish. Their talents are clear, no longer buried, but multiplied. This in turn strengthens and transforms group members’ families and wider communities.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

There are other non-government organizations carrying out microfinance projects in Burundi, but few reach out into the rural areas and many do not provide training before loans are given out. Some provide a safe place for program members to keep their money. Five Talents sees training as an integral part of the program, both in business skills and savings group formation. We are unique because we work with recently accredited literate and numerate men and women to give them business skills training along with opportunities to save and borrow with group accountability.
Team

Founding Story

Five Talents partners with the Mothers’ Union, an organization that has been training trainers and facilitators to enable over 30,000 people to become literate in Burundi over the last 12 years. An external program evaluation was conducted in 2008 and found that program beneficiaries expressed the desire for further training and capacity-building in the areas of business skills and savings group formation. The Mothers’ Union was familiar with Five Talents’ expertise in this area and contacted Five Talents in order to develop a proposal for funding to provide recently accredited literate and numerate persons business skills and savings group formation training through the Literacy and Financial Education Program.
About You
Organization:
Five Talents International
About You
First Name

Sonia

Last Name

Patterson

About Your Organization
Organization Name

Five Talents International

Organization Country

, VA, Vienna, Fairfax County

Country where this project is creating social impact

, XX, Bujumbura, Muyinga, Gitega, Makamba, Matana, and Buye

How long has your organization been operating?

More than 5 years

Has the organization received awards or honors? Please tell us about them

Five Talents won an online voting/social media contest in 2012 that awarded us $10,000, from the Giving of Life Foundation. We have also been recognized in the Catalogue of Philanthropy and received certification from ECFA and Guidestar.

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Innovation
How long have you been in operation?

Operating for 1‐5 years

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Cost.

Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

The goal is to alleviate poverty and address gender inequality by building the capacity of women in Burundi in the following areas: budgeting, saving and borrowing- resulting in improved skills for good resource management; the opportunity to establish community owned and managed saving and lending organizations; and basic business skills training- to improve the performance of income generating activities.

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,, Other (Please describe below).

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:

No need for guarantees, security of loans, external finance/capital, branch infrastructure; savings and loan capital generated i

For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

About 74% of program members are women, while 26% are men. The majority of program members are recently accredited literate and numerate persons who were identified by a baseline survey and a community-led process as being the most vulnerable in their communities due to their social circumstances. They were also the poorest, and faced challenging circumstances. The program works in six areas within the country. In the majority of these contexts, there are no formal banking or financial institutions for money to be loaned or saved. Target clients include group members who were illiterate until recently and people who have land and know how to farm.

Could your solution work in other geographies or regions? If so, where?

Yes, in rural, post conflict areas. We currently have a similar program in South Sudan which provides literacy, numeracy, business skills, and savings group formation for community members. This program is so successful, in part, because there is an established structure of trainers and facilitators to carry out this work in countries like Burundi and South Sudan, due to our partnership with the Mothers’ Union Literacy and Development Program (MULDP). Both Five Talents and the Mothers’ Union partner with the Anglican Communion worldwide to carry out their programs and this program in particular has been supported and endorsed by the Anglican Church of Burundi.

If your solution is dramatically successful, how will things be different in 10 years?

These savings and credit groups will spread throughout the six areas where we are currently working and touch communities which have not received the business skills and savings group formation training. There are about 30,000 people who have been accredited literate and numerate who are waiting to receive business skills and savings group training. Savings and credit groups will spread through imitation without need for Five Talents. The savings and loan portfolios will grow as the groups grow. Businesses will prosper through access to affordable loans that are reinvested in the community. Communities will flourish. Economic development will be clearly evident and democracy will be encouraged within the groups and practiced in the groups and in their communities.

What will have had to have changed to make this happen?

We will need additional funding to pay for the training of community facilitators who would, in turn, form savings and credit groups in their own communities. Additional funding would also serve to cover the ongoing operating costs of running the program as well as Monitoring and Evaluation expenses.

What has been the impact of your solution to date?

To date, the program has 378 groups who have graduated into savings and credit groups and who have received financial literacy and business skills training. There are currently 8,459 members of the program with over 40,000 indirect beneficiaries. Now, group members, the majority being women, are able to carry out income-generating activities, including small businesses for their families in particular, and for the community at large. Because group members decide upon the policies and procedures of the groups themselves, democracy is modelled within the group. This encourages peace and attracts new members to the program.

What is your projected impact over the next five years?

We expect to have graduated 440 savings and credit groups by the end of 2012 when the funding finishes. This will have directly impacted close to 9,000 people. Indirectly, over 40,000 more people will benefit, as on average each client has five dependents. The qualitative impact is probably more significant because of the empowerment that comes with being able to read, save, borrow, run a business and provide for the family. This is particularly transformational for women, who are given knowledge and skills to face the daily challenges of rebuilding lives, communities, and civic bodies in a post-conflict environment.

What barriers might hinder the success of your project? How do you plan to overcome them?

The success of the project could be hindered by political instability and insecurity as well as by ethnic tensions in target communities. Lack of funding will prevent the business skills and savings group training to be cascaded down through a network of community facilitators.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

By February 2013, the project plans to be reaching 8,800 people in 440 savings groups.

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Community facilitators will need to organize groups of community members to join savings groups.

Task 2

Once a group is formed, community facilitators will need to train group members in business skills and savings group formation.

Task 3

Community facilitators will mentor these groups to ensure that knowledge from training is practiced within the group and that me

Now think bigger! Identify your 12-month impact milestone

By September 2013, the project plans to reach approximately 10,000 people in nearly 500 savings groups.

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Train an additional 110 MULDP facilitators

Task 2

These MULDP facilitators will then start savings groups in underserved communities.

Task 3

Train group members in business skills and savings group formation.

Sustainability
Tell us about your partnerships

The Mothers’ Union is a global, grassroots network, of 4 million (mainly) women. Motivated by a Christian faith, they are concerned with the wellbeing of life in their communities. In Burundi they have trained over 30,000 participants to become literate. Once the members have become literate, they continue to meet in their groups, and focus on the development needs in their communities. We also partner with the Anglican Church of Burundi.

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

We currently have a program in Sudan and South Sudan, which is targeting mostly women. This program uses a similar model to the Burundi program with a goal of building the capacity of local people in literacy, numeracy, business skills and savings group formation with an emphasis on women's rights and civic responsibility in this post-conflict environment. Because of the strong local Mother's Union network, lessons learned from Burundi and the need for this kind of financial and business skills training in Sudan and South Sudan, we are able to implement this program with the Mother's Union.

What type of operating environment and internal organizational factors make your innovation successful?

Five Talents' work is successful because we emphasize building the capacity of local people and partner with community-led organizations and the local church. Local people are best positioned to meet the needs of their community and Five Talents is structured to support them.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

We need additional funding if this program is going to continue to impact more communities and people in Burundi. We also need to ensure that our story is told via marketing pieces and through social media.

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