Office of Overseas Programming & Training Support (OPATS) Community Economic Development Introduction to Savings and Loan Associations

Characteristics of a Savings and Loan Association  Self-selected Group  members  Regular meetings  Savings, Lending and Insurance  No external Loan Fund  Service Charge  Recordkeeping – Passbooks & Ending Balances  Share Out - Dividends

Characteristics of a Savings and Loan Association  Self-selected Group

Characteristics of a Savings and Loan Association  Self-selected Group  members

Characteristics of a Savings and Loan Association  Self-selected Group  members  Regular meetings

Characteristics of a Savings and Loan Association  Self-selected Group  members  Regular meetings  Financial Services – Savings – Insurance – Emergency Fund – Loans

Characteristics of a Savings and Loan Association  Self-selected Group  members  Regular meetings  Savings, Lending and Insurance  No external Loan Fund

Characteristics of a Savings and Loan Association  Self-selected Group  members  Regular meetings  Savings, Lending and Insurance  No external Loan Fund  Service Charge

Characteristics of a Savings and Loan Association  Self-selected Group  members  Regular meetings  Savings, Lending and Insurance  No external Loan Fund  Service Charge  Recordkeeping – Passbooks & Ending Balances

Characteristics of a Savings and Loan Association  Self-selected Group  members  Regular meetings  Savings, Lending and Insurance  No external Loan Fund  Service Charge  Recordkeeping – Passbooks & Ending Balances  Share Out – Dividends

How a Savings and Loan Association is Organized General Assembly

How a Savings and Loan Association is Organized Management Committee Chairperson Secretary Box-keeper Money Counter 1 Money Counter 2

How a Savings and Loan Association is Organized The Constitution – Objectives – Membership Criteria – Management Committee and Elections – Meetings – Savings – Lending – Service Charge – Emergency Fund – Fines – Members leaving the association – Member Signatures

Savings Regular contributions – weekly, biweekly, monthly Savings through purchase – 1-5 shares Withdrawal on demand

Weekly Savings in Shares Buy 1-5 Shares $$$$$ $$$ $$ $ $$$$

Internal Loan Fund Loan Fund $ $ $ $ $ $$ $ $$ $ $ $$$$$ $ $ $$$ $ $$ $ $ $$$$ $ External Loan Fund

Fines Loan Fund Fine

Emergency Fund Loan Fund Emergency Fund $$ $

Cash Box Three Locks Key holder Box keeper

Loans C C B B A A Loan Fund Loan $12 Loan $80 Loan $24 Good Rule: Loan not more than three times the amount of a member’s savings Examples: At the end of four weeks: Member A has saved four shares = $4. Her loan is $4 x 3 = $12 Member B has $8 in savings. His loan is $8 x 3 = $24 Member C has saved 5 shares per week or $20. Her loan can be $20 x 3 = $80

Service Charge C C B B A A Loan Fund Loan $80 Service Charge: Usually 10% of the loan per month Example: Loan = $80 Service Charge = $80 x 10% = $8 Total To Be Paid Back = $88

Loan Repayment Example A C C B B A A Loan Fund Member A: $12 Loan Loan Payment = $3 Service Charge payment = $1.20 Loan Balance Due = $12- $3 = $9 New Service Charge = $9 x 10% =.90 $4.20

Loan Repayment Example B C C B B A A Loan Fund Member B: $24 Loan Loan Payment = $0 Service Charge payment = $2.40 $24

Loan Repayment Example B C C B B A A Loan Fund Member B: $24 Loan Loan Payment = $0 Service Charge payment = $2.40 Loan Balance Due = $24 – 0 = $24 New Service Charge = $2.40 $24

Loan Repayment Example C C C B B A A Loan Fund Member C: $80 Loan Loan Payment = $10 Service Charge payment = $8 What is Loan Balance Due? What is New Service Charge? $18

Loan Repayment Example C C C B B A A Loan Fund Member C: $80 Loan Loan Payment = $10 Service Charge payment = $8 What is Loan Balance Due? What is New Service Charge? $18 Answer Loan Balance Due = $80 - $10 = $70 New Service Charge = $70 x 10% = $7

Share Out and Action Audit Loan Fund $ $ $ $ $ $$ $ $$ $ $ $$$$$ $ $ $$$ $ $$ $ $ $$$$ $ Insert example here

SLA Training  Insert Chart

The Kit VSL Associates 2008

The Passbook Post Adaptation: Insert an image of the front page of the passbook and a share value page

Questions?

Four Phases  Preparatory: meet with local officials, leaders, and communities. See if people are interested  Intensive Phase: conduct six trainings  Development Stage : groups works on its own, coach monitors progress  Maturity Phase: train on Share-out & assess. Association graduates.

coach’s Timetable  Preparatory: 2-3 weeks, 2-4 meetings  Intensive Phase: 2-3 months, weekly meetings  Development Phase: Three months, monthly meetings  Maturity Phase: Attend the last meeting

Reference Guide – Table of Contents  What is a Savings and Loan Association ?  Why are Savings and Loan Associations needed?  Why work with Savings and Loan Associations?  Role of the coach  Who would be a good community partner?  Will a Savings and Loan Association work in my community?  How to start a Savings and Loan Association – Mobilization – Training – Supervision and Monitoring – Action Audit  Record-keeping  The Emergency Fund  The Importance of Keeping Time  Quality vs. Quantity  Tips for Establishing a Strong Savings and Loan Association  Safety & Security

Reference Guide Appendixes  Meeting Agendas  The Toolkit  Training Session Plans  The Constitution  Meeting Procedures  Passbooks  Health Observation Checklist  Self-Assessment Tool  Data Collection Form  Sample Savings and Loan Association Report  Member Number Cards