Saturday, 15 January 2005 - 2:00 PM

This presentation is part of: Income Policy and Economic Development

Saving in a Women’s Microfinance Program in Honduras: Implications for Household Development?

Purpose: This paper analyzes the experiences of women who participate in a microfinance program, Génesis, in an impoverished community in the outskirts of Tegucigalpa, Honduras. The microfinance program obligates its members to save, along with loan services and financial education. Focusing on the savings component, this paper addresses two questions: How do participants view the purpose and outcomes of their saving? What are the implications for long term financial well-being and development in their households?

Methods: Face-to-face in-depth interviews were conducted with 40 women who had participated in the program for at least one year. Selection was based on a non-probability purposive sample of women who had completed a minimum of three loan cycles, allowing sufficient time to explore the relevance of savings in the women's financial lives. Twenty-two of the most communicative women participated in one of two focus groups and eight staff members were interviewed to fully understand the program structure and policies. Interviews were audiotaped, transcribed, and analyzed using Atlas-ti qualitative software (Miles & Huberman, 1994) and were coded according to a code list derived from a review of the literature and other studies of saving (Sherraden, et al., 2003).

Results: The study finds that required saving facilitates debt payment, mobilizes savings into formal financial institutions, and encourages regular savings deposits. The study also illuminates how the majority of participants think about their savings as an emergency fund or an insurance mechanism for debt payment, though there is evidence to suggest that their saving may be contributing to household and business net worth in some cases.

Implications: Results suggest the importance of paying greater attention to the potential of required savings to contribute towards increases in household net worth. A program that captures participants’ small surpluses and develops them into long-term investments and asset-building (Sherraden, 1991) could empower women and provide the means for long-term household development.

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