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A Friends & Family Approach to Money


Suppose you’re in need of a small but significant amount of money. Let’s say, a few hundred dollars that  would help you pay for school or buy a car to commute to work. Who would you rather ask for credit: a bank, or a trusted friend or family member?

If you went for the second option, you’re with the seven million people across fifty countries that are participating in ACAF’s savings groups methodology.

Almost a decade ago, I started ACAF to provide a solution for a new wave of immigrants living in Spain. My previous work in the public sector had offered a glimpse into the social and financial challenges low-income immigrants face every day as they seek economic security and a better life.

For one, they are often unable to access credit for cash flow problems in their businesses, pay for their children’s education or make home improvements. Instead, they turn to money lenders that provide loans on terms that may be unfair and abusive.

Because they often lack reliable social networks, they may have a hard time adapting to a new culture and connecting to job opportunities.

ACAF’s savings groups introduce a novel approach that’s effective and fun. With support from the Levi Strauss Foundation and Ashoka: Innovators for the Public, our model has expanded to reach low-income people in countries across Europe—including Italy, Portugal, Hungary and the Netherlands.

This is how a savings group works. Every month, clusters of friends, family or acquaintances get together and invest money into a common pool. Some members also ask for credit to cushion the blow of a financial emergency or pay for a long-term goal. As both shareholders and customers, members decide on the terms and conditions for all transactions.

Over time, their accountability to the group helps them build networks of trust and support.

Some members link others to new job prospects, while others babysit the children or repair the homes of others. They may also share information on how to access free or low-cost medical care and education.

In fact, over half of all members report that their savings group is their only social network.

Savings groups are more than a way to put money aside to meet unexpected financial emergencies or invest in long-term goals. They become spaces for people to strengthen social ties and improve their quality of life.

In response to overwhelming demand, ACAF recently created Winkomun, a free online platform that allows people anywhere in the world to launch and sustain their own savings group. See how Winkomun works—and how it’s changing people’s lives—here:

Note: Make sure to turn on the CC option on YouTube if the subtitles don’t start playing automatically.