Community Savings Pool Program
Our mission with this project is to support communities in Western North Carolina to meet their goals through cooperative savings and lending. We do this by creating a replicable, customizable savings pool model and providing training and savings pool startup services to community groups. As we gain more experience we are exploring savings and lending strategies that are overtly designed to equitably distribute of wealth, access, information, and power.
We recognize that marginalized communities worldwide have been using co-operative economic strategies such as savings pools for generations, and that we are new to this. The model we have adapted for use in the United States is based on the work of Living Economies in New Zealand.
We envision savings pools catalyzing community control of resources including businesses, housing, land and farms, energy infrastructure and grassroots healthcare enterprises. And because we understand that communities (and therefore savings pools) are as strong as the myriad relationships within them, and we nurture those connections to build a strong regional network that’s focused on our collective good.
What is a Community Savings Pool?
Community Savings Pools (CSPs) are relatively informal private groups of people who pool their savings and make loans for each other to use. Members can contribute any amount, either lump sums or regular savings. CSPs can be any size, but they are often kept small (10-25 members) to foster trust. Most pools have a shared bank account requiring multiple signatories and regular real-time meetings (such as shared dinners) as well as ways to communicate between meetings. They often naturally develop a group culture of mutual support beyond financial savings and loans, for example through home improvement support, no-charge equipment loans, and other ways of lending a hand.
Pool members decide individually (or as households) how much money to save with the group. Members may also request to borrow, suggesting their repayment schedule. The group as a whole decides whether to grant each request, and they may request security, especially on larger loans. The pool supports its members by making interest-free loans. Rather than paying interest borrowers pay back their loan plus an additional amount towards their savings. This strategy supports the pool because it makes more money available for lending to other members as well as supporting the borrower in building their savings.
CSPs require good communication, cooperative decision-making, and mutual commitment. If you aspire to develop these qualities, you may find that a savings pool is a good tool. Your savings pool can include members who do not have any money to contribute at the outset.