Love – an untapped driver of financial inclusion?

“The children tell me – I didn’t plan to save any money today, but when you hug me, I just feel like saving”. Catheline, RLabs Tanzania Finance Officer

Thirty-one young people have signed up in the first two weeks of launching our new savings scheme for street connected youth. Every morning, a small group of young people crowds around Catheline to bring money they’ve earned over night. Throughout the day, boys show up to deposit anything from 1,000 TSH to 20,000 ($7.7). The youngest is 12, and the eldest is 23, most sleeping on the streets and saving up to move in to rented rooms and start businesses.

This is the latest in a line of RLabs’ innovations in financial inclusion.

Inspired by the power of Care International’s Village Savings and Loans Associations (VSLAs), we first took the model to rural school leavers living at home and unemployed with no income. The young people thought it couldn’t be done, and so did the wider community. Combining VSLAs with Grow Leadership training showed young people that they can leverage the small amounts of money passing through their hands, and that they can start businesses from the resources around them. The results speak for themselves – 3,071 members and $131,000 saved to date.

We also took the model to college students. The first groups at Ruaha Community Development Training Institute have just shared out from their first 12-month cycle and are joining a second cycle, citing many benefits, from being able to pay college fees to starting businesses that their families continue. The college leadership loves it (as previous attempts at savings groups without Grow had not worked) and has made Grow Leadership training mandatory for students.

We know that young people can and want to save to achieve their goals, even in the most difficult circumstances. For our new Grow Street participants it was clear that having a way to save was even more urgent than normal – they don’t have family support for food, and have no safe places to keep money. But weekly group savings in VSLAs wouldn’t work so we went back to the (design-thinking) drawing board using behaviour change models to work out a fool-proof system.

Using the CREATE funnel to analyse the actions needed to save and where the process might break down (Cue, Reaction, Evaluation, Ability, Timing, Experience)

From this, we designed a simple system. The RLabs Tanzania team agreed that they would be available any time of the working day to record savings, leaving meetings where necessary so that no child was ever discouraged and missed out on saving due to staff not being available. Each child has their own passbook with their picture and their savings goal and motivational slogan. The book is stamped with custom stamps for the amounts saved, to increase trust that the numbers can’t be changed.

That’s the mechanics, the design thinking process. But the secret sauce is RLabs Culture. Our deep belief in the young people’s capability, and our ability to build trust through a culture of love.

As I write this article, another young boy comes in and wordlessly hands a phone number to Catheline and walks out. All the talking has been done at other times. Catheline explains that he has a lot of problems, but he has asked her to call his mum to ask for forgiveness, as she had done previously for Juma (name changed). Juma had been sleeping on the streets since he was 7 and in prison several times. With Catheline’s help he has reconciled with his mum, and recently sent her 20,000 TSH ($8). Last week he paid for a room from his savings, finally moving off the streets age 18. Word spreads quickly among the young people and 170 street youth have engaged with RLabs’ activities over the last six months.

Of course, we’re thrilled to see these young people taking off as they deserve. There is also profound learning for securing financial inclusion for the most marginalised groups. Access to financial services can only be unlocked with truly Human Centered Design in its fullest sense. HCD to design the most appropriate savings mechanism for the user, and meeting our fundamental human needs for hope, encouragement and validation.

Adapted savings model: using stamps and passbooks, street-connected youth can save any time of the working day.

Author: Naomi Rouse Supporting the brilliant team at RLabs to scale their entrepreneurship programme

Stay connected with RLabs Tanzania by following them on social media: Facebook | Instagram | Twitter | LinkedIn

Please follow and like us:

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.