Three insights from Banking on Change’s State of Linkage Report

by 30th Oct 2015
Three insights from Banking on Change’s State of Linkage Report

Banking on Change is a partnership between Barclays, CARE International and Plan UK that is breaking the barriers to financial inclusion and improving the quality of life in some of the world’s poorest communities, by giving people the skills to save and manage their money effectively. Since 2009, the partnership has made a difference to the lives of 750,000 people around the world living on less than US$2 a day by setting up community savings groups who save and lend together, with a key focus on reaching young people.

Banking on Change has responsibly linked more than 3,600 informal savings groups (representing around 96,000 people) in five countries to formal financial institutions, over half of which have been linked to Barclays’ products and services. We have found that savings groups that are linked to banks save more, members take bigger loans to invest in new types of income-generating activities, and many individuals graduate to individual bank accounts. For this reason we believe that savings groups offer an effective springboard from which poor individuals can start a journey to financial inclusion.

Earlier this year our partnership commissioned a piece of research that has allowed us to develop the State of Linkage Report. The report provides, for the first time, a global mapping of linkage activity between savings groups and formal financial institutions around the world. In total, we were able to identify nearly 90 financial service providers – including banks, microfinance institutions and mobile network operators – that provide formal financial products to groups across 27 countries.

Identifying the organisations participating in linkage and acquiring up-to-date, detailed information on the products they offer to groups was surprisingly challenging. This brings into perspective the difficulty savings groups face when trying to access and compare linkage products and make informed decisions about which are most suited to their needs. We are excited to know that the State of Linkage Report will act as a starting point for addressing this knowledge gap.

To mark World Savings Day (31 October) we would like to offer a sneak peak at three insights from our research:

1) (East) Africa is leading the way

More than 60 percent of the savings group products offered globally by banks, microfinance institutions (MFIs) or mobile network operators (MNOs) are found in Africa. Furthermore, nearly half of all group savings and credit products available in Africa are found in just three East African countries: Kenya, Uganda, and Tanzania. With a combined savings group population of at least 3.5 million people, financial institutions in these three markets have recognised the significant savings potential of this market, estimated to be close to $200 million annually (assuming each member saves $58 per year).

2) Commercial banks have a major role to play

Whereas mobile money services are largely credited for the rapid increase in individual account ownership over the last several years (through personal mobile money accounts), our research shows that banks and MFIs are playing a more prominent role in the delivery of group financial products: 9 in 10 group products are directly linked to a bank or MFI product of some kind. More importantly, 70 percent are owned by a commercial bank, lending additional credibility to our assertion that there is a strong business case for banks to develop products and services for savings groups. Among commercial banks, linkage appears to be driven almost entirely by banks operating at a local or national level. In fact, the research could only identify four banks that are offering savings group products in more than one market: Barclays (Ghana, Kenya, South Africa [Absa], Tanzania, Uganda and Zambia), Bank of Africa (Kenya, Uganda), Kenya Commercial Bank (Kenya, Rwanda) and Ecobank (Burkina Faso, Zambia).

3) Savings comes first, but not last

Most of the products available to groups are basic savings accounts that impose zero or minimum account fees and opening balances. Where account fees exist, they are typically offset with value-adding features or services such as SMS notifications, internet banking, ATM cards, free withdrawals, group passbooks, and interest on savings. Interestingly, 40 percent of the banks that offer savings accounts also provide groups with access to credit – suggesting that this is an increasingly important element of the value proposition to both the groups and the bank. We have seen examples of banks that are willing to lend up to four times the amount saved by the group, while others take a more conservative approach by allowing groups to access loans worth up to 90 percent of their savings.

The first draft of our report will be shared with participants at the SEEP Network's Savings Group Conference in Lusaka, Zambia from 10-12 November 2015 and will be made available on an updated version of this blog at the same time.

Download the draft report here or click on the link at the end of this blog. [Download added 10 November 2015]

We would like to encourage other organisations funding, facilitating or participating in linkage to notify us of any linkage products or services that are not currently captured in this report. Please email This email address is being protected from spambots. You need JavaScript enabled to view it. to share your feedback, or to let us know if you will be at the SEEP SG2015 conference and would like to share your feedback in person.

The deadline for feedback is 30 November 2015 and we aim to publish the final report by the end of December.

The report was commissioned in support of the Linking for Change Savings Charter, which aims to build a powerful global alliance of leading organisations who commit to developing and rolling out new savings products for poor communities in the developing world. To access more information on the Charter and learn how your organisation can support its work, visit:

This blog was updated with additional information on 3 November 2015.

Matt Wilson

Matt Wilson is Assistant Vice President, Global Community Investment at Barclays, where he manages the Banking on Change Partnership.