During 2015-2016, the Aga Khan Foundation began piloting digital savings groups in Lindi and Mtwara, two of Tanzania’s poorest provinces, where AKF’s Coastal Rural Support Programme has been operating since 2009 to support the Government of Tanzania’s national strategy for growth and poverty reduction. DSGs are groups of 15-30 members who pay into a common platform, at any time, from the “mobile wallet” of their choice. Savings are pooled for purposes of issuing loans within the group. Members can take loans of up to three times their savings balance for periods of up to three months, generating a profit that is shared amongst members at the end of an annual cycle. The groups receive no external funds.
DSG groups meet once every two weeks to review the savings and loan repayment activity since the last meeting, check their financial statements, and issue new loans. Loans can only be issued in meetings.
A randomised approvals process, which is facilitated by the DSG platform and is applied to the issuance of all loans, ensures fairness and full participation in decisionmaking. This in turn ensures that DSGs are safe and transparent for members. No member can access critical functions on the platform outside of meetings, including office bearers.