TOOLKITS Digital Financial Inclusion Toolkit
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Digitizing community savings groups

What it does. It supports groups of people engaged in community saving in moving from physical cash to digital mobile money. In community saving, digitization offers advantages in terms of transparency, security, and financial inclusion. In South Sudan, the most common form of community saving is called sanduk, which means “box”. We use this term throughout the description of this tool.

Value proposition for the government/other partner. Digitizing sanduks makes cash available to members to borrow during emergencies. It allows members to save and borrow money easily, and track transactions and savings to build a financial profile that enables them to secure bank loans. Additionally, this process will enable any entity seeking to improve the operational efficiency and safety of analog savings group processes, to digitize them and provide records of financial transactions that banks and other formal institutions can use to extend financial services. Finally, a private sector company can use this process as a form of R&D to develop a financial services product to serve excluded rural communities. Or civil society organizations may utilize the training component to provide women in informal business with basic business and digital literacy skills. All this means increased access to financial services, and therefore (directly), a boost to financial inclusion and (indirectly) a boost to business growth.

Why and when to use it. To replicate the model successfully, several conditions need to be in place, such as:

  • Structured community savings groups;
  • Ubiquitous mobile money services provided by private sector entities;
  • Private sector partners that can ensure the continuity and sustainability of the services;
  • An enabling environment for innovation, as defined by policy, legislation and best practices;
  • Good quality contextual information, such as the level of infrastructural support, physical and digital security, logistics, socio-political contexts, and how these elements will facilitate or hamper the use of digital technology;
  • Training in digital literacy, financial literacy, and how to use legal services, to help sanduk members learn the basics of business management and market rules and regulations.

In the long term, addressing the lack of banking infrastructure will also help community savings schemes transact more efficiently.

Known issues and troubleshooting. Technical infrastructure such as phones and mobile network access, and community savings groups who are willing to try digital solutions, are required to replicate this model.

Cost. The entire activity cost approximately 100,000 USD, allocated as follows:

  • 12,0000 for the community immersion (flights to Abyei and Warawar, ground transportation, security, and food);
  • 16,000 for technical support;
  • 60,000 for community engagement (commodity booster packages, M&E, and ongoing commmunication with savings groups);
  • 10,000 for capacity building trainings.

People. The required roles for this experiment include:

  • Community mobilizer/local partner. This implementing partner, most likely a CSO, will have deep community ties so it can lead the community immersion, mobilize the community, and conduct financial literacy training.
  • Interpreter. The interpreter will ease communications between the implementing team and the community, if needed.
  • Technical counterpart. A software developer who has soft skills and understands the community will build the product.
  • Research team. These research volunteers can document insights. [double check]
  • Data analyst. The data analyst will design the survey tools and process the data collected.
  • Technical Support. The technical support lead will support the project lead. [double check]

Context. In remote areas along borders, making payments is often a struggle, banks are inaccessible, and access to finance and financial services is nonexistent. Many communities in rural settings use sanduks, or community savings groups, to pool money and safeguard it from wildfires. Similarly, at the border of South Sudan and Sudan, crossborder traders often send money to Khartoum through Cairo for the purchase of their goods. This extends the amount of time it takes to get their goods delivered.

An “analog-to-digital savings” experiment was launched to explore innovative ways to address these challenges. The theory of change was that by digitalizing sanduks, group members in communities would keep their communally pooled funds safe, provide access to emergency funds for social needs, such as paying school fees and medical bills, and build digital financial profiles that would enable members to solicit loans from financial service providers. The initial focus of the experiment was on women’s financial inclusion, and cross-border traders were later added.

The series of steps taken to execute this experiment included the following:

  1. Co-creation. The co-creation, baseline, and solutions mapping phase brought the accelerator labs from South Sudan and Sudan and together with local border communities to better understand their on-the-ground contexts and lived experiences. This phase was critical to establishing a deep connection with the communities and to ensuring community ownership of the proposed saving innovation. This co-creation process resulted in community-informed updates and revisions to the concept, processes, and budget.
  2. Validation survey. This stage was critical to assessing community buy-in and validation of the digital sanduk model, drafting a work plan and budget, identifying on-the-ground partners and supporters of the initiative, and benchmarking the labs’ understanding of context and lived experience.
  3. Community Immersion. The objective of the community immersion was to enhance the quality of innovation through active listening, observing, learning, and constructive interaction with key community stakeholders that were critical to the success of the innovation.
  4. Launching of the digital sanduk. During this stage, sanduk members completed their registrations for digital mobile money accounts and tested the digital sanduk platform. Specifically, members of the experimental group transferred their shares digitally to a separate sanduk platform.
  5. Close-out/Roll out. The South Sudanese lab team travelled to Warawar to debrief participants and stakeholders about the experiment outcomes, outlining the digital sanduk journey.

Follow this link to learn more.

Focal points. Jacqueline Aringu and Tong Atak.

Country, year, and language. South Sudan, 2022-2023, English.

Resources.