On February 28th 2017, the third National Forum on Linking Informal Savings Groups to Formal Finance will be held in Dar es Salaam. Let’s review what it is exactly about.
LinkUP: what is it?
The National Forum on Linking Informal Savings Groups to Formal Finance is part of CARE International Tanzania’s LinkUP project. LinkUP aims at training Village Savings and Loans Associations (VSLAs), and giving them the opportunity for financial inclusion. Indeed, the low and unpredictable income of poor people makes it difficult for them to bank with formal financial institutions. CARE has found that joining informal savings groups does not only provide valuable financial services to the ultra-poor, but can also provide an opportunity for formal financial inclusion. To date, more than 7000 groups have already linked with one of CARE’s bank partners; for many of their members, it has been the first formal bank account they have ever known.
The LinkUP National Forum
As part of LinkUP Project, the National Forum brings together stakeholders from across the financial services sector to share experiences and concerns about scaling up financial services for unbanked groups and their members. Through these discussions, the National Forum aims to:
- Create a space for information sharing and agenda setting among key market actors
- Enhance collaboration and unity in the promotion of financial inclusion for savings groups
- Gather stakeholder input on barriers to scaling up financial services for savings groups
- Build stakeholder understanding of savings groups as clients and what works in serving them
The first two Forums
The third Forum is taking place after the success of the last two forums, held on October 8th 2015 and April 21st 2016. The first was focusing on the demand side (costumers) and aimed to understand unlinked groups’ concerns, since only 19% Tanzanian people have a formal financial account. For groups which decided to link, the main reason was safety and security; for those which did not, it was mainly because of transaction charges, trust issues and unsuitable banking products. The second Forum was dealing with the supply side’s concerns but also showed the many advantages that banks could have if they were more inclusive.
Focus of the third Forum
After analyzing both demand’s and supply’s concerns, the third Forum will focus on the relationship between regulation and the opportunities for informal savings groups to access formal financial services. CARE and financial Institutions are aiming at scaling-up their work by achieving a more supportive environment for banking linkage, specifically through favorable legal framework and policies. After a speech of our guest of honor Dr. Ashatu K. Kijaji, Deputy Minister for Finance and Planning in Tanzania, the forum will be the opportunity to discuss the impact of Tanzanian Policy Framework on financial inclusion for informal saving groups.