Savings is at the heart of community mobilisation. Savings activities start long before any physical development. By saving together, families learn to trust one another. This trust provides the basis for effective collective action. By setting up effective savings collectives, the community generates valuable social capital through building networks of trust, accountability, and transparency. As the saying goes, “we do not collect money, we collect people”. There are a number of advantages to community-based savings: Firstly, savings draws people together on a regular basis. Secondly, savings build a local resource base and makes communities more resilient against the perils of poverty. Thirdly, this process creates an on-going learning environment.
When the woman’s savings collective in an area is strong, then the entire federation is strong. The system of savings and loans is designed to maximise the interaction communities have with one another. Despite the universal relevance of savings in building communities and alleviating poverty, the application of savings systems differ between FEDUP and ISN. Where FEDUP constitutes a membership base around savings schemes, ISN mobilises communities around an issue-based agenda for upgrading, which involves community contributions in cases where CUFF funding is accessed. FEDUP has since 1992 organised more than 24,517 savers in 401 active women-led savings groups across 45 towns. FEDUP has been able to secure tenure for more than 25,000 families and has facilitated the creation of grassroots housing associations that have constructed more than 15,000 formal houses. Savings are also a mobilisation strategy of the ISN which is conceptualised as community contributions towards individual and collective upgrading when CUFF funding is accessed. ISN seeks to balance issue-based mobilisation for better services, alternatives to relocations, and tenure security with building local resilient communities through regular savings.
The solidarity, capacity and trust built through savings and loans at settlement level are clearly the great replicators. They also create the basis for an attendant willingness to share and to spread risk. These may be regarded as the two critical ingredients necessary for the innovations needed to take pro-poor development to scale.
Savings are dynamic and non-linear. In some areas, FEDUP groups have pioneered innovative savings collectives. These include savings funds aimed at funeral insurance, stokvels, food coupons, housing maintenance, and savings towards pre-finance loans through uTshani Fund.