Local savings for local people
By Jon Khoo |
Up to recently, for a fisherman such as Eduardo Valmoria Fuog (Jao Island, Bohol), the concept of regular savings seemed impossible. With unpredictable catches it was difficult enough to get by on subsistence let alone thinking of savings… uncertain of his weekly wage, the last thing Eduardo would want to do is leave his job for a 90 minute round trip to visit a bank run by people he didn’t even know.
For Christina Pepito, without convenient access to banking, saving for the luxury of a VCR or to help her sister’s education seemed like pipe dreams. With Net-Works, community banking is its cornerstone. Without it, Net-Works would not happen as this is where nets are sold into the supply chain. By bringing the community together to organise local savings, there’s a system that Eduardo and Christina can trust, that’s nearby and provides financial inclusion.
Community banking within Net-Works
Once the nets are collected, they are sold into the Net-Works supply chain via a local loan clubs (locally known as COMSCAs) or an existing microfinance group. The COMSCAs are small local groups of 10-25 members and it’s a model that is focussed on serving the very poor whose income isn’t so reliable and who may not be working full-time.
Recently, I spoke to Amado “Madz” Blanco, our Project Manager (Net-Works) at ZSL-Philippines to pose a few questions about the impact that COMSCA’s were having. A key figure in the establishment and scaling of our project, and with over 20 years experience working in development and conservation, Madz is a man in the know and a man who is passionate about the impact of COMSCAs.
So Madz, what difference have COMSCAs made to the communities?
“There’s a big difference in the way people in the communities now see savings. Before, they would need to travel far to a traditional bank or co-operative. Depending on the village it might be 45-60mins to a bank or co-operative. That’s a few hours as a round-trip, taking people away from fishing… the effect of this was it stopped people from saving. People who might not have had the time or resources had difficulty in saving money. Now village people look at savings as being managed locally by members of that community.”
The proof of this can be seen in COMSCA popularity. In the village of Guindacpan, in the first year there were 18 members of the COMSCA, move on to year two and we were fully subscribed early on.. It appears word has been spreading fast about the benefits of COMSCA membership and it’s resonating with the communities.
COMSCAs fitting around the daily lives of the fishermen
It’s important that any COMSCA fits around the daily lives of the fishermen and their families. For Madz, that’s one of the benefits… the brevity of the COMSCA meeting is a key advantage. Madz explained, “ It’s not time consuming and meetings are completed within an hour, which is very important in a fishing village where many people have fishing related chores and roles to play throughout the day.”
In addition, with fishing catches varying, to Madz, the flexibililty and affordability of COMSCAs is a key advantage. Madz notes “COMSCAs are flexible and affordable … you can choose how much to invest. If you’ve not been very lucky in your last fishing trip, you might scale back one share, or increase your share when things are good. It fits with the routine of a fishing village… for fishing is very opportunistic”.
For more details on the COMSCAs and other community banking aspects click here.