The SILC Method, a Participatory Success
My Vignette: “It's a truly amazing thing to witness these women in SILC groups. The meetings are run so efficiently. Even though I can't understand any of the words, I can see them debate about whether the loan someone is asking for is a good investment. All the people are gathered in a circle under the shade of the whispering matoke leaves. Sure, there may be problems with local politics in any community group like this, but what's happening here before my eyes is really helping people. These loans are helping people improve their livelihoods. It's pretty cool! ”
During my time working with the UPFORD program in Nnindye the participatory program within UPFORD I had the most exposure to was the SILC program. SILC stands for Savings and Internal Lending Communities, and it's an international program coordinated by Catholic Relief Services. SILC is essentially a way to introduce micro-lending to rural areas that have no access to the formal financial sector. It is a participatory program because SILC groups are totally organized and coordinated by local village leadership, albeit with help from CRS field workers following the formation of a group.
SILC groups consist of self-selected groups of individuals, an arrangement that has been proven to boost attendance and pay-back rates. Membership is open to both women and men, but in the case of mixed groups at least three of the five Committee members elected to manage the group should be female. The maximum recommended number of members in a SILC group is 25.
Characteristics of SILC groups
- members save money that goes into a common pool of loan capital for other members to access once the amount of group savings is sufficient.
- groups are completely owned, governed, and self-regulated by group members, and this is fundamental to their sustainability
- members actually write their own constitutions with the help of field agents, specifying rules for resolving disputes and the conditions for saving and lending
- Interest rates and pay-back schedules are determined by the groups.
- Interest is paid monthly, and members I met use their loans for building storage shelters for their produce, or for buying farm inputs like pigs.
- All transactions at meetings are carried out in front of the group to ensure transparency and accountability. This ensures that all members of the group are able to witness who has saved and who has not, who has borrowed and who has not
- Groups meet at agreed-upon times, usually bi-weekly, for cycles that last from six to eight months.
- After the end of the cycle, money members have saved in the common pool is paid out respectively.
Importance of Leadership
In my own experience with SILC groups, the leadership elected plays a significant role in determining the success of groups. Some groups may choose leaders who are respected in the community, but may not be the best leaders, possibly because they are too old. CRS recognizes these problems, but because SILC is a community-based program, it is imperative that field agents allow groups to determine their own leaders. Once a field agent talks with the group about the characteristics they might want to consider when electing their leadership, groups vote democratically.
Community Welfare
One of the most interesting aspects of the SILC methodology is the social fund. Groups specify a certain percentage of saved monies be put aside in a social fund to help members who experience significant difficulties, such as the loss of a family member or grave illness. SILC has its own social welfare system!
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Individual Livelihood Strategies
- Coping and survival: allow people to get through difficult periods.
- Risk reduction: reduce peoples' vulnerability to shocks.
- Empowerment: strategies increase the influence of SILC members in community affairs.
- Asset recovery: strategies allow people to recovers assets lost in disasters.
- Asset diversification: strategies establish a greater range of asset types to increase resilience in the case of adverse shocks to one income source.
- Asset maximization: increase a person's capability and income. Finally, a
- Asset protection: protect existing assets. These strategies are pursued through utilizing SILC as a financial resource to save and take out loans, and as a resource to build human and social capital.
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In the context of vulnerable surroundings, wherein threats and hazards impinge on villagers' income security, the SILC program hopes to achieve several outcomes identified by CRS. These are
Individual Livelihood Outcomes
- people having sustainable access to a social fund for emergency purposes, a secure savings system with positive returns and an internal loan fund
- financial and social empowerment of individuals, households and communities
- improve community resilience in times of hardship
- provide a platform for villagers to solve domestic and local development problems
Integral Human Development: SILC as Community-Building
SILC tries to develop the whole person through the “Integral Human Development Model.” According to CRS, the IHD framework “begins with the end in mind – that is, people are able to lead full and productive lives, meeting all of their basic needs in a sustainable manner while living with dignity in a just and equitable social environment.
This holistic personhood-development model is designed to strengthen individual intellectual thinking skills while connecting whole communities. The diagram above outlines how strengthening the physical, natural, spiritual, social, political, as well as financial assets of communities is theorized to allow SILC participants to pursue livelihood strategies, but also to engage with and shape community structures, institutions, policies, power structures, and social, religious, economic, and political beliefs. The hope is that engaged citizens will challenge religious or cultural assumptions, and develop the political influence to build inclusive, just communities. SILC groups become sustainable when SILC members with improved skills or social capital improve community institutions, creating public goods while spawning more SILC groups.
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CRS officials gave examples to me of Integral Human Development working in the real world.For example, CRS has observed that SILC programs greatly increase community solidarity, as members take greater interest in the health of other community members, share agricultural techniques, and discuss potential solutions to community problems. This increased community solidarity is a risk-reduction strategy, and it helps community institutions or local government to work more effectively; the community is more united. Improved institutions, in turn, can work with SILC members to facilitate business opportunities. SILC strengthens communities from multiple perspectives!
In my experience, why SILC works: "I always ask in my interviews whether SILC members think the program is successful. I've gotten a remarkable consistency with these answers, but one villager today summed up why SILC is so successful in a pretty succint way that I liked. She said that villagers feel compelled to attend SILC meetings because of social pressure, but once they are there they really like the idea of the money staying IN the community. The money isn't kept in a fancy bank, and it's so convenient. She said that SILC strikes a perfect balance between enforcing rules and attendance through community pressure, but also being a non-threatening, non-mysterious, extremely convenient way of saving money. I agree with her. SILC is convenient, but it's also efficient. That's what makes it a successful participatory program."
This is a copy of the research report I conducted about SILC groups this summer. I analyzed the basic business skills of SILC members and suggested ways of improving the program through business-skills trainings.
nnindye_silc_paper.doc | |
File Size: | 462 kb |
File Type: | doc |