Before I started my fellowship with Aga Khan Foundation U.S.A. (AKF USA) in November, I worked as Program Officer for the Mountain Societies Development Support Programme (MSDSP), a project of Aga Khan Foundation in Tajikistan, which is my home. I started my career at the village level, where I worked as the deputy head of a village organization. To start working from the grassroots level and then move up is interesting and challenging. It is like a long caravan journey in search of treasure. One thing you learn is the real-life problems faced by communities, and that teaches you valuable lessons for development.

With MSDSP, my focus was on Community-Based Savings Groups (CBSG), which are small associations for saving and borrowing, based on a model tested in Asia and Africa. A CBSG is a group of people who pool their savings and take out loans. In Tajikistan CBSGs have proved to be one of the best ways to transform communities while building their skills and awareness, and reducing poverty.

As a Program Officer at MSDSP, I provided technical assistance to field staff, monitored program activities, mentored and trained staff, and used the program’s Management Information System to track data about CBSGs.

How Does a Community-Based Savings Group Work?

Historically CBSGs grew from a methodology for Village Savings and Loan Associations in Nigeria. Members save money through buying shares, electing a management committee and developing rules that reflect their constitution. In the CBSG model, a management committee usually consists of five people elected democratically by a secret ballot of all the members (minimum 18 and maximum around 25). Members gather bi-weekly to buy shares in a loan fund, apply and get loans, and contribute to a social fund. The basic function of the social fund in CBSGs is to assist poorer members during emergencies, on a grant basis. Once a year, the group “shares-out” its loan fund, in other words returning the principal plus interest to each member in proportion to how much each has contributed. After a year of close supervision, typically, CBSGs can operate with no outside support from MSDSP.

Communities Reap the Benefits

Before CBSGs, villages faced serious constraints in accessing financial services. People had few choices for meeting their financial needs and often did not have a savings plan. With the advent of CBSGs things changed completely in the villages where MSDSP works.

The savings groups brought the idea of savings to communities in a way that allowed people to meet their financial needs and pay for social services such as health care, education, and major life events. Indeed, CBSGs now play a significant role in the financial landscape in Tajikistan, especially in rural settings. With a simple process, CBSGs are providing valuable financial services to the poorest quartile of the population, restoring the idea of savings, and making community-level microfinance workable.

Economic Empowerment and Local Problem-Solving

On December 31, 2013, there were 2,288 CBSGs operating in MSDSP areas, all begun since 2009. In addition to social and economic empowerment, CBSGs have also created a platform on which community-based problem-solving flourishes.

Working with CBSGs, I gained experience in project management from a local perceptive, and gained a worm’s eye view of the challenges that development projects face. That is valuable experience.

Since coming to the United States and working at AKF USA, I have enjoyed the professional environment of the Programs Department and the opportunities I have experienced within an organization that values learning and sharing best practices. For example, each AKF USA fellow makes a presentation, so on February 11, I delivered a presentation entitled “Community-Based Savings Groups: The Case of Tajikistan” to share my experience with my new colleagues in Washington DC.

Looking to the Future

The presentation on the impact of CBSGs in Tajikistan was welcomed with interest from my colleagues. Many knew about CBSGs in other settings; the Tajikistan experience raised many good questions. At the same time, I received helpful suggestions for improving my presentation skills in a professional environment. Ultimately, making the presentation helped me to articulate my experience, practice my presentation skills and learn from others.

I look forward to learning much more about how international development looks from both donor and recipient perspectives during the rest of my fellowship, and to sharing that here.

By Muyassar Yormamdov, Professional Development Fellow at the Aga Khan Foundation U.S.A.