Safesave (B): Providing Financial Services to Slum Dwellers

This paper reviews the performance of SafeSave and sets targets for the next three years.

SafeSave was started in 1998 by Stuart Rutherford as an experimental financial service offered in the slums of Dhaka, Bangladesh. The model offered savings, loans, and loan-related services at clients doorstep, daily. Loans were voluntary and their amount based on clients request. There was no minimum amount or repayment schedule for the principal. The maximum loan amount depended on the borrowers savings deposit level and/or the amount pegged by the project implementers. The paper discusses SafeSaves operations in terms of:

• Branch operation;
• Interest collection and loan repayment;
• Internal controls;
• Product innovations and modifications;
• Use of handheld computers in service delivery;
• Performance in 2004;
• Sustainability.

SafeSaves annual report in 2004 indicated that branch profitability was due to high rates of interest. In 2005, SafeSave started implementing more stringent policies. It continued, however, to offer loans without a repayment schedule. The organization hopes to increase its return on equity, achieve higher operational sustainability, start another branch and grow its client base in 2005.