In remote villages, better finances means better health

Posted: April 1, 2013

The Winchester Star

Project HOPE employee Rachel Miller recently spent two weeks in South Africa organizing a “savings mobilization” program. (Photo by Scott Mason/The Winchester Star)

MILLWOOD — When Winchester native Rachel Miller found herself in the South African township of Zanspruit in February, it was exactly where she wanted to be.

Instead of organizing conferences at Carter Hall, the Millwood estate owned by the nonprofit medical organization Project HOPE, she spent two weeks organizing a “savings mobilization” program — something she studied in college and wants to make her life’s work.

Using a metal box with three locks, the 24-year-old helped poor women in South Africa set up their own financial institution — a village savings and loan.

So why is a health organization interested in small business financing?

The answer is simple: to improve health, said John Bronson, Project HOPE’s director of income generation programs.

Project HOPE has known for years that underlying poverty affects people’s health, Bronson said.

The nonprofit has worked on micro-credit projects in nine countries, but the savings and loan program is different because it’s funded solely by villagers, unlike micro-credit programs in which the sponsoring organization puts up money to get the financial operation under way.

“It’s a simple way to help people make the most of what they have,” said Miller, a graduate of Millbrook High School and James Madison University.

She created fliers about the savings and loan program, and nurses at a Project HOPE clinic in Zanspruit handed out.

She also went door-to-door in the slum areas asking people to come to an organizational meeting.

That raised some eyebrows.

The racial divide between black and whites is still wide in South Africa, she said.

“They saw me walking around, and there were lots of questions,” Miller said, but she was “welcomed with open arms.”

Using an interpreter, she explained to people how the savings and loan program works, and several groups decided to try it.

Friends and neighbors usually form groups.

“They have to be people you know and trust,” Miller said.

Once a group organized, Miller showed them how to control their finances and run their mini-loan business.

“We give them a step-by-step manual,” she said.

Each group meets on a regular basis, and everyone contributes money at each meeting to buy one or more “shares” in the financial project.

The money is kept in a metal box, and the group selects a chairman, secretary and treasurer. There also is a health advocate who presents programs at monthly group meetings on health, nutrition, parenting and any other topics of interest.

As members contribute funds, the group’s assets rise and it can begin to make loans to participants who want to start or expand a small businesses.

“Only members can apply for loans from the group,” Miller said.

The goal is to have each group completely independent and functioning on its own in a year, she said.

At the end of each year, the group meets and divides the money in the box, according to everyone’s share.

Loans made during the year have, hopefully, earned interest as they were paid back, meaning each shareholder has a small profit to show.

The process then can begin again.

A majority of the people who join together to pool their savings to help each other are women.

“We almost always focus on women,” Bronson said, because in developing countries, women have less access to formal financial services.

“Part of that is legal and part of it is cultural,” he said.

Having access to financing is “very empowering” for them, he added.

If the women in a group make a profit from their financial endeavor, they often put that money into things that offer a better quality of life for their families, such as a better floor in their home or better food or education for their children, he said. And that, in turn, will improve health.

Before joining Project HOPE, Miller volunteered to work on a similar project in Kenya.

“Kenya was my culture shock,” she said.

The poverty there was of a totally different dimension than anything she’d seen before. Three hours outside the city of Nairobi, she saw villages in roadless areas, where babies laid in the dirt as flies crawled on their faces.

“That’s why I’m so passionate about village savings and loans,” Miller said.

She stays in touch with the groups she organized through talks with a field officer who remains active with them.

And she’s had some good reports.

One group has already put together $1,140 Rand. Given the fact that the Rand is worth $8 U.S. dollars, that’s a good start for a loan program.

Project HOPE has also successfully started village savings and loans in Namibia and Mozambique.

According to Bronson, most of the groups end up averaging a 20 percent return on their investment.

Unlike micro-credit programs, these groups are self-sufficient.

“It’s more powerful,” said Bronson, “because it’s more indigenous.”

— Contact Val Van Meter at