New Working Group to support growth of local savings and loans UNDP, UNCDF joins with NGO community to strengthen community programmes

07 Aug 2014

imageMembers of the World Vision-supported Halibur savings and loan of suco Madabeno in Aileu. Photo by Dongjie Zhang/UNDP

Dili, 7 August, 2014 –Timor-Leste has seen impressive growth of savings and loans groups formed by NGOs in rural communities throughout the country during the last decade. Until now, however, there has been no opportunity for these NGOs to come together and share approaches and best practices.

In an effort to strengthen communication between the NGOs and growth opportunities for the savings groups, Inclusive Finance for Underserved Economy (INFUSE), a joint program between UNDP and UNCDF, has formed the Savings and Loans Technical Working Group.

The Working Group brings together 11 of Timor-Leste’s biggest INGOs, with the aim to improve implementation and advocate for the development of the country’s savings groups. It will meet quarterly and will continue to work with the Ministry of Commerce, Industry and the Environment (MCIE) to formalize groups and help those that are well-established progress to become formal institutions such as agricultural cooperatives or credit unions.  Among its first orders of business is to conduct a nationwide assessment of the groups.

“All organizations in the Working Group have experienced similar challenges and opportunities throughout years of implementation of savings and loan groups”, said Noura Hamladji, UNDP Country Director a.i. “By sharing and analyzing the lessons learned, Group members will have the opportunity to work together to improve their methodologies, explore new developments and strengthen services.”

According to an April 2014 UNDP report, rural households in Timor-Leste frequently experience a ‘hungry season' of up to three months without sufficient stocks of rice or maize. These shortfalls are currently offset by government imports and the distribution of subsidized rice. 

Through individual savings and loans programs, communities are trained in numeracy and literacy skills which help strengthen their ability to save and grow their assets. Groups that match specific criteria are able to borrow to start up microenterprises, make payments for essential services, build a safety net of produce and livestock, and other community specific initiatives.

There are currently more than 300 groups and almost 8000 members across the country with 148 groups, almost 50% of the total, located in Oe-Cussi alone. Thirty-eight of the groups are comprised of and managed by women.

Oxfam, which is implementing a savings and loan program through local partners in Oe-Cussi, Cova Lima and Liquiça, currently supports around 28% of all savings and loans groups in Timor-Leste. The next largest programme is implemented by World Vision which supports 17% of the country’s groups.

With support from Oxfam and its partner Joventude Eaperanca ba Futuru (Youth Towards the Future), rural women such as Flora de Jesus of Cova Lima have experienced first-hand the benefits of the program for her family and community.

“Floods wiped out my family’s crops.  But because of my involvement in the community-run kiosk, we had enough income to eat and continue sending my children to school,” said Ms. de Jesus. “Through this program I have learned literacy and bookkeeping and have more control in my life.”

Members of the Savings Groups Technical Working Group include, CARE Australia, Caritas Australia, Catholic Relief Services (CRS), International Women’s Development Agency, Mercy Corps, Oxfam, Plan International, Seeds of Life (MAF), INFUSE, World Neighbours and World Vision Australia.

For further information about the Savings Groups Technical Working Group please contact Donald Zhang dongjie.zhang@undp.org.

For information about Oxfam’s savings and loan programmes please contact Sharon Alder, sharona@oxfam.org.au.

About UNDP: UNDP partners with people at all levels of society to help build nations that can withstand crisis, and drive and sustain the kind of growth that improves the quality of life for everyone. On the ground in more than 170 countries and territories, we offer global perspective and local insight to help empower lives and build resilient nations.

In Timor-Leste, UNDP provides technical advice and assistance to build strong and capable public institutions at national and sub-national levels in justice, parliament, human rights, anti-corruption, police, economic development, environmental management and disaster risk management that bring development, peace and justice to the population and reach out to the poor and vulnerable sections of society.

About UNCDF: UNCDF is the UN’s capital investment agency for the world’s 48 least developed countries. It creates new opportunities for poor people and their small businesses by increasing access to microfinance and investment capital. UNCDF focuses on Africa and the poorest countries of Asia, with a special commitment to countries emerging from conflict or crisis. It provides seed capital – grants and loans – and technical support to help microfinance institutions reach more poor households and small businesses, and local governments finance the capital investments – water systems, feeder roads, schools, irrigation schemes – that will improve poor peoples’ lives. UNCDF programmes help to empower women, and are designed to catalyze larger capital flows from the private sector, national governments and development partners, for maximum impact toward the Millennium Development Goals.  

About Oxfam Australia: Oxfam Australia focuses on practical solutions to help rural communities out of poverty and towards sustainable livelihoods. For more than 40 years, we have been supporting development and humanitarian work in Timor-Leste. With an integrated program model and a community-led approach, Oxfam works in partnership with local civil society organisations to strengthen the livelihoods and voice of rural men and women in Timor-Leste.