Savings Groups, Financial Education and Relationship Sales

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Training our local entrepreneurs from Comalapa, Sacatepequez on how to start their own savings groups among themselves and other community members.

“What are your dreams in life?” I asked the group of eight SolCom entrepreneurs from Comalapa during a financial workshop focused on savings one Friday. One of the women, Doña Paula, took the opportunity to tell us about her childhood dream of opening her own tailor shop for her community to be able to put herself through school. She explained how she grew up in a household with four other siblings. Money was tight and the family could not afford to have all of their children in school. She was the unfortunate one to be chosen to stay at home and help her mother with the day to day household chores. Not accepting the situation as it was she applied to the local municipality program that was selling sewing machines on a payment plan to families in the community. The municipality at first denied the 9 year old Doña Paula saying that she was too young to be able to make the payments on the machine. They eventually came to an agreement when her uncle decided to be her guarantor for the machine. She then went on to use the sewing machine to repair community members clothing at a low price and was able to make enough money to make her monthly payments and own the machine outright.

To this day she has that sewing machine and has used it as one of her principal sources of income alongside the raising of chickens and the weaving of traditional Maya clothing. Doña Paula was not able to return to school, but she was able to save money from the profits of her small tailor business to help put her two children through high school who now both have stable jobs. Doña Paula’s story was an excellent example of how one can use a life goal as a motivator for savings, which was the topic we were discussing as part of the financial workshop component of my savings group project here at Soluciones Comunitarias.

When thinking about the best way to integrate savings groups within SolCom and the MicroConsignment Model I recognized a unique opportunity to use a different tactic to when entering into a new community. This realization came in part from reevaluating my project design during the Project Design course I took over the summer. Starting a master’s program has forced me to take a step back and really pick apart my project. Doing so has helped me better understand how savings groups can be mutually beneficial to community members and SolCom simultaneously. Relationship building is a key factor to success when trying to sell any type of product or service. At SolCom we want to build strong and trusting relationships in the communities where we work. To build and maintain those relationships we can use educational workshops and creation of savings groups to show communities that we are here to help them help themselves.

My process when entering into a new community has three phases. The first phase is to make that initial contact in a community and plan a meeting with the community members to give a 1-1.5 hour long financial literacy workshop. During the workshop I guide a conversation based on understanding where one’s money is coming from and where is it going. We compare income and spending and try to brainstorm ways we can all spend less money, which in turn means saving money. I take this opportunity to talk about SolCom’s water filters and wood stoves, both of which can help them save money in the long term. We then discuss the act of savings and purposefully setting aside money to be used in the future.

Why does anyone save money in the first place? As Doña Paula demonstrated beautifully with her personal example, I try to get the participants to think about their goals in life and frame them in terms of long term goals and short term goals. Their short term goals, such as Doña Paula’s purchase of a sewing machine, should help them to achieve their long term goals, such as her being able to save money to put her children through school. Having goals is a good motivator for saving money. Lastly we discuss ways to save money, including savings groups. The focus is on gaining an understanding of the financial options in the community and then having the participants make a comparison of their current options with the option of starting their own savings group. After this part of the discussion with the SolCom entrepreneurs they decided they are very interested in starting their own savings group. At the end of the workshop I ask participants if they are interested in learning more about savings groups and if so I plan a second meeting to discuss more about the savings group opportunity.

Phases two and three are the savings group workshop and the training of savings groups if at the end of the workshop they decide to start their own group. The hope is that through this process the community members see SolCom as an organization that is there to help them and not just sell them products. The trained savings groups will have formed a trusting and long lasting relationship with SolCom and be much more likely to purchase products in the future. Even better, savings group members tend to be thinking more about their future, planning their finances and are also much more financially capable to purchase the products. I can foresee members saving their money with the goal of eventually purchasing a SolCom wood-burning stove.

The opportunity for education has the most potential for social impact and strengthening our relationships with communities. Down the line SolCom can return to the savings groups and give various educational workshops similar to the financial literacy workshop. We can give workshops on nutrition, potable water, how to start a business, etc. the possibilities are endless! By first focusing on forming strong relationships and then taking advantage of the trust that is created SolCom can greatly increase its sales—and its positive social impact.

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