Graduation and Social Protection

Graduation and Social Protection GROWING TOGETHER FOR SIGNIFICANT RESULTS VSLA for financial education An effective tool for exit strategy from social protection to economic self reliance Social Protection (SP) beneficiaries organisation in VSLA SP beneficiaries micro Savings and loans Formal financial linkage and economic opportunities promotion Regular and Sustainable household income Social Protection (SP) program/initiati ves start up Financial education of SP beneficiaries SP beneficiaries small business Entrepreneurship and technical skills development Graduation and social Protection International Conference Kigali, Rwanda, 6 th -8 th May 2014 Glycerie NIYIBIZI Senior Economic Empowerment Manager/ CARE

Rwanda social protection strategy The aim of Rwanda social Protection program 1. Reduce poverty and inequality 2. Enable low income people to move out poverty cycle 3. Remove vulnerability and protect low income people from chocks 4. Enable low income people to contribute to economic growth

Social protection target group context Their vicious cycle of poverty begins with spending without any kind of saving 4. Lower income/more needs for spending Limitations for SP beneficiaries: 1. Spending High econom ic insecuri ty 3. Decapitaliz ation Cash flow management Future planning Financial services use 2. Low/unstable income Numeracy and entrepreneurship skills

Social protection target group context The way out the vicious cycle of poverty begins with micro-saving and Loans activities 4. Formal saving and credit 5. Higher &stable investment Economic security/ Sustainable livelihood 3. Regular small income 1. Micro Savings and loans 2. Small investment/ IGAs

VSLA as effective tool for exit strategy from social protection Why the methodology? VSLA group weekly operation meeting Weekly meetings serve for VSLA groups members saving culture ownership trough a learning by doing process; VSLA regular meeting constitute social capital for VSLA members. VLA groups record keeping is mendatory VSLA group TOOL KIT/ member individual pass book; three locked saving box and group's ledger book are adult literacy teaching materials; Weekly meeting operations record is part of financial literacy & provide overal picture of formal financial services operation. Mariam Mutesi, a VSLA group member's case Saving culture insite VSLA members to investment in productive initiatives Little investment lead to regulat an progressive of increase of income Regular income lead to increase of savings and high stable investment

Voluntary Savings & Loans Methodology Status Inclusive Finance and Economic Development VSLA methodology Financial literacy promotion Knowledge to better manage financial resources Asset building for families of participants Entrepreneurship and demand for investment capital Greater ability to demand higher quality products and services from financial institutions Financial education to social protection beneficiaries trough VSLA; Enabling environment for social protection beneficiaries access to economic opportunities; Entrepreneurship skills promotion; FFIs appropriate products development Economic development stakeholders Coordination and synergy Short term Social Protection program/initiatives promotion Stakeholders comprehensive package of services to social protection beneficiaries Formal financial services appropriate products and entrepreneurship technical skills promotion Enterprises and market linkage backstopping and graduation to economic self reliance

Graduation and Social Protection Social Protection graduation framework Social Protection (SP) beneficiaries organisation in VSLA SP beneficiaries micro savings and loans Formal financial services and economic opportunities promotion Regular and Sustainable household income Step 1: Social Protection program/initiatives start up and social protection beneficiaries or caregivers organization in VSLA Step 2: SP beneficiaries VSLA groups members micro saving &lending operation ; learning by doing process for financial literacy Social Protection (SP) program/initiati ves start up Financial education of SP beneficiaries SP beneficiaries small business Entrepreneur ship and technical skills development Step 3: SP beneficiaries VSLA groups members micro investment in income generating activities Step 4: Formal financial services appropriate products accessibility and entrepreneurship technical skills promotion Step 5: Entreprises and market linkage backstopping and graduation to economic self reliance

Graduation and Social Protection Conclusion The social protection initiatives should help the target group to plan for exit starting by small savings with a goal and lending for investment. This learning by doing process is an effective and sustainable way of low income people financial education for economic self reliance and formal financial services appropriate product accessibility. A combined effort and the resulting synergy becomes essential to all stakeholders, if this low income population segment is to be graduated from social protection.

Graduation and Social Protection Fore more information please see the handout: VSLA for financial education An effective tool for exit strategy from social protection to economic self reliance Contact person: Glycerie Niyibizi Senior Economic Empowerment Manager glycerien.rw@co.care.org CARE International in Rwanda P.O. Box 550, Kigali Phones: +250 252 583147/48 +250 788557893