Mpendulo Savings is committed to strengthening the economic resilience of vulnerable families and marginalised community members through savings groups in the Eastern Cape. Importantly, this NPO offers financial education for all members (85% women) and business training for those who are interested in starting or improving their business. The initiative has increased the numbers of micro-businesses in the Eastern Cape, improved household budgeting and debt management and helped improve community social capital.
The NPO launched in 2009, when a group of community members got together to address the impact of poverty, which they believed was a major contributing factor to crime, children’s vulnerability and family instability. “This is true economic empowerment and the reason why we are supporting this initiative,” said Marion Green-Thompson, Economic Development Manager for Jeffreys Bay Wind Farm.
Jeffreys Bay Wind Farm has contributed over R515 000 to Mpendulo Savings. The donation forms part of Jeffreys Bay Wind Farm’s socio economic development programme which has invested over R2million into local communities so far. “Our development programme will impact positively on the communities in Humansdorp, Hankey and Patensie areas, with a particular focus on education, health and women,” explained Green-Thompson.
Mpendulo’s Director and Founder, Jill Thompson, oversees all aspects of the project, which five years down the line has over 1700 members, 85% of whom are women. This initiative has been successful in helping its’ members to gain economic independence, avoiding debt and providing access to small loans with which to start small businesses. She explains that the Jeffreys Bay Wind Farm’s donation will be spent on project operations, funding all aspects of savings, financial education and enterprise development training. “It will also provide us with the opportunity to further develop our staff skills as well as in coaching and mentoring” added Thompson.
HOW THE SAVINGS SCHEME WORKS: Mpendulo Savings Scheme helps people to form modern savings and lending groups based on the long-standing, traditional South African ‘stokvel’ system. This NGO is instrumental in facilitating the process and training members.
The NGO informs township communities about the project through public meetings, leaders and existing saving group members and encourages people to choose their own group members. Each group must have between 10 and 20 members. Our Field Officers then conduct workshops about savings, usually at one of the group members’ homes or businesses.
The core business revolves around modernizing the traditional South African stokvel (rotating savings and credit association) as a way to:
The objectives of Mpendula Savings are clearly defined: firstly to establish 100 sustainable Savings Groups with 800 members per year in the Cacadu District in the Eastern Cape Province; to increase the number of members who engage in micro-business by 30%; and lastly to improve household budgeting and debt management of 50% of group members.
As a result of joining a Savings Scheme, vulnerable households have access to sustainable, reliable and self-managed financial services. This in turn assists members to better manage their cash flow, which enables families to withstand crises and avoid going to money lenders. Households increase their income sources as well as protect and gain assets. Communities will ultimately experience enhanced social capital as members strengthen bonds of mutual assistance in financial and social matters.
“We engage with groups in an 18-month ‘training’ relationship, during this period, a Field Officer attends savings meetings, mentors the group’s management committee and members, reinforces the initial training which is done before members begin saving, ensures that the groups adhere to their constitution, counsels the group about any issues or conflicts that arise, and monitors their first share out, which occurs 10 – 12 months after the group is formed,” explained Thompson. The Field Officer will visit the group again in their new saving cycle since this is typically when new members join to ensure they are adequately briefed and that they sign the group’s constitution.
At the end of the 18 months, if the group is deemed to be healthy, they ‘graduate’ from the project’s direct oversight. This means that the group will sustain itself and manage its own affairs without continued assistance from the project. Field Officers only visit to collect data about the groups’ savings every quarter. This frees up the Field Officer to attend to additional groups or to expand to other areas.
Thompson’s background includes 25 years in micro-enterprise development. She also possesses expertise in analyzing household economics and the role of micro-enterprise services to improve the ability of families and communities to cope with the impact of the HIV/AIDS. Other skills were gained as a Peace Corps volunteer in Burkina Faso and Sierra Leone, before going on to becoming the Associate Peace Corps Director for Small Enterprise Development in Mali, West Africa; thereafter in Botswana, Southern Africa. Her experience is extensive and impressive, including being part of a small team who were responsible for the first ever study to examine the economic impact of HIV/AIDS among microfinance clients in Kenya and Uganda.