SafeSave
This page is about SafeSave, a microfinance institution using 'Poor and Their Money` principles
A collector at work
SafeSave was founded in 1996 in the slums of Dhaka, the capital of Bangladesh. It began as a partnership between Rutherford and Rabeya Islam, a Dhaka housewife who ran successful savings clubs for slum dwellers. Rutherford wanted to test out his idea that the poor would welcome an MFI that offered them savings and loans for everyday money management, rather than just loans for microbusinesses. His experience with MFIs (see below) made him sceptical of the usefulness of groups and of joint liability, both to the clients and to the institution. He believed that frequency, reliability & flexibility of services mattered more.
SafeSave therefore does not organise clients into groups, so there are no compulsory meetings and no joint liability. Each client receives a daily visit from a bank worker (known as a Collector, and a slum-dweller herself). At each visit, the client can make a saving, withdraw money from savings, or make a repayment on a loan, in any amount he or she prefers - including nothing at all on days when cash is scarce. The loans have no fixed term and no fixed repayment schedule, as it is believed that clients should be free to match their behaviour to their individual circumstances.
The SafeSave experiment was controversial. However, sixteen years on, we can see that the poor welcomed the services enough forSafeSave to grow and become profitable. For details, please turn to its own website, www.safesave.org
Rutherford first put the ideas in The Poor and Their Money into action in 1985. For ActionAid, he set up schemes in rural southern Bangladesh, and in the slums of its capital, Dhaka. Both were inspired by the Grameen Bank, but modified to make them less oriented to loans for microbusiness finance and more towards savings and loans for everyday needs. The urban scheme was the first to bring microfinance to the Dhaka slums. Both schemes survived when Rutherford left ActionAid and now run in modified form managed by others.