Connecting Savings Groups to Mobile Money in Mozambique
Savings groups play a major role in the financial lives of rural Mozambicans—especially women. Through this longstanding, informal, self-organized mechanism, groups of friends and relatives come together regularly in their community to save money and sometimes lend, borrow and repay amongst themselves. Savings groups typically meet on a weekly basis to register their contributions and deposit them together in a locked box. The box may be kept in a secret place by the group president, while other members retain the keys to one or more locks. Despite these basic security measures, keeping a large sum of cash in a box is inherently risky—theft, fraud or fire can readily wipe out years’ worth of members’ pooled savings.
Meanwhile, the growing availability of mobile phones and mobile money in Mozambique offers opportunities for people to bank more securely. Equipped with knowledge of mobile money services, a connected mobile phone, an understanding of how to access and safely use mobile money, and the confidence to try it, underbanked people throughout Mozambique can tap into formal financial services, thereby expanding their options for safe savings and other services to improve their economic resilience. Without these prerequisites to access—knowledge, understanding, access to a phone and confidence—however, people remain excluded from the benefits of mobile money.
In 2012, with funding from the African Development Bank, FARE (Economic Rehabilitation Support Fund, a government initiative working to boost private sector enterprises) launched a project in Mozambique to link women’s savings groups to mobile money services. The project aimed to improve access to finance in rural areas and to provide a safer means to store money collected by savings groups. FARE tapped Ayani to provide technical assistance to make this linkage, drawing on Ayani’s extensive capacity building in the Mozambique inclusive finance sector since 2010. From 2017 to 2018, Ayani assisted FARE in linking savings groups to mobile money in two provinces—Manica in the Center and Inhambane in the South.
Ayani’s technical assistance comprised four main components: market assessment, equipping and training savings group facilitators and members, and building a business case for service providers.
Over 8 million adults in Mozambique still lack access to financial services. Recent progress in mobile money usage and the expansion of linkages to savings group can represent an effective contribution to reducing this gap. Ayani continues to partner with local stakeholders such as the Central Bank, national funds, retail financial service providers and rural development organizations to provide more service points, reach underserved people and enhance financial inclusion in the country. Ayani maintains an office in Maputo to facilitate its support for national inclusive finance sector development at the macro, meso and retail level.