From access to empowerment: community-based savings groups in rural Tajikistan

In 2021, only 39 percent of Tajiks had a bank account. Numbers are lower in rural areas, with less physical access to a bank, and amongst women, who often have lower financial literacy and more responsibilities preventing them from engaging with formal banking.

Banks charge relatively high interest rates, concentrate their branches in urban areas and require paperwork to set up accounts. They tend not to accept very small sums as savings, and are reluctant to lend money for agricultural needs. Other loans can be exploitative. If crops fail or a family member needs medical help, most individuals in remote areas of Tajikistan therefore rely on informal networks as a safety net.

The Aga Khan Foundation (AKF) and USAID have established community-based savings groups (CBSGs) for thousands of users through two programmes: Economic and Social Connections: A Multi-Input Area Development Financing Facility for Tajikistan and the ongoing Thrive Tajikistan: Partnership for Socio-Economic Development. The CBSGs support the Government’s aim of involving those in rural areas, particularly youth and women, in social and economic transformation, while reducing inequalities.

The groups follow the model used successfully by AKF in Africa and Asia since 2009. AKF provides the initial mobilisation, training and technical support to help members set up and run the groups effectively. Supplied with tools for bookkeeping and education on financial management best practices, taking out loans and management of a social fund, each CBSG is then organised and managed by the members themselves. The group saves together and members can take out small loans to start or expand a business, or pay for expenses such as unexpected healthcare needs or planned education. The savings and loan profits are shared out each year at a time when members typically need the funds. Profits stay within the community, with some being used for those in greatest need.

A safe place to save

Accountability is built into the structure of how the group collects and stores funds. Members have passbooks, recording transactions which are carried out publicly at meetings for transparency. Shares and dues collected from all members are kept in a lockbox. The leader, treasurer and secretary each have a key, all three of which are needed to open it.

Access to credit

A woman from Ganj CSBG says, “I have a son who is studying at the university, and just to pay for his study, I needed a loan. I did not go to any of my relatives to ask for cash. I did not go to the bank… I just came here and addressed my problem with our group, and we solved it and I took a loan. And after three months, I paid it back.”

Anora, from another Khatlon village, was able to attend school part-time with support from her CBSG. She took out a loan to continue her studies at the University of Bokhtar, with plans to graduate in two years. “I have many hopes for my future,” she says. “I want to become an interpreter one day.”

Financial training for household and business management

A member of Guliston CBSG says, “Before I joined the savings group, I kept cash around the house. I would put it under the bed, and sometimes I’d forget where I put the money. But now, after several training sessions conducted for the CBSG, I know how to manage cash – how to plan for it and prioritise the expenses of our household.”

“This CBSG has equipped us with the knowledge and the practice to manage cash in our households,” says another member. “I have a private small shop. Nowadays, I know how to effectively manage the cash to keep it running – how much to save for this and for that.”

Multiplying the benefits

Ganj CBSG was established in 2015. It has 40 members, 35 of them female. The group has given many members the confidence to explore small business ventures and to speak up more in the home. “Before, when we were not meeting as a group, we didn’t discuss our ideas,” a member of Ganj CBSG says. “But now, we have a unique place where we can talk to each other about ideas, about starting our own businesses. Our heart is warm knowing that we have support and savings here.”

Rahimova Sabohatmo of Kuhdoman CBSG in Tagi Namak agrees. “Women in our community get motivated, when they see how we improve our lives by being part of the group. As an example, in the first stage we had 15 people, in the second 18, in the third 24, and now we have 30 women in our team.”

This trust enables neighbours to work together, achieving impressive results. In Safedoron Village, many of the women depend on their arable land and remittances from family members for income. Zebo Qalandarova was working on her land in 2019 when the Thrive Tajikistan: Partnership for Socio-Economic Development programme established a CBSG there. From 23 people, the group rapidly grew to 60 members, divided into three CBSGs.

Between them, they collected enough money to set up a Common Interest Group in the form of a sewing workshop. Under Zebo’s guidance, this created jobs for six women, who also train girls in sewing.

“Before this sewing workshop, women had to go to the district centre to sew their dresses for a higher price,” says Zebo. “We sew for schoolchildren and men as well. During the Navruz holidays, we got more orders from young ladies. We were able to expand our business, opening two shops in the district centre. We have also trained 36 students, including six orphans who had limited opportunities.”

Eighteen-year-old Safarova Fotima is the daughter of one of the sewers and receives training in the workshop. “I would have never discovered my sewing skills without coming to this workshop. It seems I unintentionally influence my friends and peers as they keep asking me about my experience of working here. My younger sister started to come and learn sewing,” she says.

Like hundreds of thousands of Tajiks, Fotima’s father has migrated to Russia for work. Becoming aware of his daughters’ interest in sewing, he bought them a manual sewing machine to enhance their skills at home.

Zebo is proud of empowering women and girls in her community. She says that the workshop brings an equal income for every member and is famous in the district. “However, we don’t forget to give back to the community. For instance, when the President came to our district, we sewed tablecloths for 100 tables voluntarily.”

Parvina Khudoyorova of Kuhdoman CBSG concurs: “As part of our CBSG we have a separate foundation, the money from which we give to people in our community who are in need. Last time, during Navruz, we gave some money to a little boy who is an orphan.”

While CBSGs aim to increase financial inclusion, nurture small businesses and empower individuals in marginalised communities, their benefits are clearly reaching far beyond the participating households.