Future of savings clubs here - Solomon Star News

Future of savings clubs here

06 February 2015

In the considered opinion of the authors, savings clubs in some form are here to stay in the Solomon Islands.

In the developing world and more particularly in Africa, Asia and Latin America, informal financial services like Savings Groups, Chit Funds, Rotating Savings and Credit Associations (ROSCAs) and Accumulating Savings and Credit Associations (ASCAs) co-exist with formal financial service providers like banks, insurance companies, credit unions, and non-bank financial institutions.

For the Solomon Islands, with its unique challenges, savings clubs can be developed to provide primary access to basic financial services and through this intermediary, develop a path for its members towards the formal financial system over a longer term.

Therefore there is a need to create new savings clubs particularly in remote locations, to try to revive and strengthen old dormant savings clubs, and align all of them towards sustainable progress by guiding them to follow the recommended principles, methods and best practices.

The CBSI, PFIP and several important stakeholders recognise savings clubs as very important to further financial inclusion in the Solomon Islands and to continue to contribute to the economic development of the country.

Therefore it is in the best interests of the Solomon Islands and its people that savings clubs are promoted, nurtured and developed in a sustainable manner.