Rural SPEED is a USAID-funded program designed to improve access to financial services in the rural areas of Uganda. One of its primary objectives is to increase savings in rural communities. Terri Kristalsky works for Chemonics International as Chief of Party for Rural SPEED. In this interview conducted by CGAP's Savings Information Resource Center (SIRC), she explains how Rural SPEED is working to enhance savings from both the supply and demand side of the savings mobilization equation.
SIRC: Do rural Ugandans save?
Kristalsky: A 2005 Rural SPEED study showed that 81% of people in rural Uganda save—but only 13% of them save with a formal financial institution. People lack access to formal financial institutions and also tend to be wary of them. Many Ugandans hide cash at home.
Given the dramatic floods that occur in the country and wipe out homes, it is quite likely that there are millions of Ugandan Shillings drifting down the Nile.
SIRC: How is Rural SPEED trying to deepen and strengthen Uganda's savings offer?
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Kristalsky: Savings options for poor people in Uganda's rural areas are very limited. Community-managed financial institutions are often the only savings options accessible to the rural poor, besides informal organizations.
Rural SPEED faces two challenges: first, people are unaware of the benefits of saving in a secure institution, and second community-managed savings structures are inconsistently safe and professional. This is why we have a two-pronged approach:
- On the one hand, we promote savings through major promotional campaigns.
- On the other we invest time and money to strengthen SACCOS and microfinance deposit-taking institutions.
Broad-based savings promotion campaign
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The campaigns use a mix of marketing techniques such as radio advertising, billboards, road signs, posters and flyers. We also organize road shows in rural areas. Small, but useful, gimmicks with savings messages are handed out: the coin-purse with the message "Saving pays in many ways" is very popular.
We also distribute notebooks that explain what to look for in a financial institution. We organize music, games, and have funny plays designed to encourage people to save in secure institutions. One play, for example, tells the story of a poor man who stores money in a wooden box and sees his savings eaten-up by termites. All these activities are captured in the video of the campaign.
Strengthening SACCOS
SACCOS are the main financial institutions active in the rural areas that Rural SPEED targets. However, all of them are not equally good—and some even have serious governance and performance challenges. Rural SPEED's approach is to closely support a few organizations that have strong potential outreach, with training and mentoring, while also strengthening the sector as a whole, for example by developing tools for SACCOs.
SIRC: What are the lessons learned on savings promotion campaigns?
Kristalsky: Right place, right time. The time of year is crucial. It's useless to launch a savings promotion campaign at Christmas time, but harvest is a good period to deliver a savings message. Road shows should also coincide with other events, such as fairs and markets, that attract a lot of people.
Right attitude. Road shows are a great opportunity to reach out to new clients. Financial institutions should mobilize their staff and put all their energy in active marketing; briefing staff beforehand and encouraging partners to develop their own marketing strategy helps increase ownership and enthusiasm for the campaign.
Right medium. Campaigns should build on popular local media. In Uganda, newspapers have virtually no outreach in the rural areas, but nearly half the population listens to the radio. During the 2007 "Save Today, Better Tomorrow" campaign, our radio programs were aired over 3 months in 8 local languages and on 14 radio channels.
SIRC: What are the results from the "Save Today for a Better Tomorrow" campaign?
Kristalsky: So far the results have been amazing. During the 2006 campaign our partners increased their number of savers by 22%. After the 2007 campaign, they gained 46% of new savers and saw a 17% increase in the total value of their savings.
Rural SPEED partners have reached over 300,000 new savers in 3 years. In a country of 30 million people, knowing that 1% of the population has gained access to a secure financial organization feels like something well worth the effort.
A more extensive interview with Terri Kristalsky is available on the Savings Information Resource Center.