Savings groups, livelihoods and education

Stuart CameronEric Ananga

funded by Plan UK via its Partnership Programme Agreement with DFID

Context•Despite free primary education, households face formal and informal education costs, especially at higher levels•Plan and other NGOs facilitate savings groups – low-risk microfinance that foster a savings habit, smooth income and build financial assets

Research question•Does access to better, village-level facilities for saving and borrowing improve educational outcomes and expenditure?

Approach•Review of research and evaluations of SGs, mostly from Africa•Qualitative research on 2 villages in Ghana where Banking on Change projects operate

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Possible mechanismsShare-outs /

loans

Changes in household decision-

making

Spending on education expenses

Increased attendance /

enrolment

Learn more

Enhanced livelihoods

IncomeChild

labour

Food and health care

Nutrition and health

Women invest more in children’s

education and health

Changes in patterns of spending or work

(smoothing)

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Literature review

• RCTs for CARE programmes in Ghana, Malawi, Uganda, and USAID-funded savings group in Burundi, Saving for Change in Mali

• Large number of less rigorous evaluations – often no control group / no baseline-endline comparison

• Most are predominantly quantitative but with focus group discussions or in-depth interviews to complement

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Literature review: direct evidence for impact

• Share outs and loans often used for education (though not the main use)

• Savings groups ↑educational expenditure in some contexts.

• Lack of strong evidence on education enrolment but small-scale studies (Uganda, Ethiopia) suggest positive impact

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Literature review: indirect channels

• ↑business activity• Mixed evidence on assets and income• Mixed results on child work: may ↑ or ↓• Mali – improved food security• For child health no evidence of improvement

from the strongest studies• Expenditure decisions shift towards female

household members• Groups act as sites of collective action,

sometimes favouring education

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Little new research since 2013?• Gash and Odell (2013) Synthesis of RCTs finds mixed

and limited evidence on health and education spending. May be used to ease timely payments rather than increasing total.

• Brannen & Sheehan-Connor (2016) Zanzibar: possible (non-robust) effect on educational expenditure

• Brunie et al (2014) Mozambique - potential effect on seasonal and transitory food security, but need supporting interventions

• Lønborg & Rasmussen (2014) Malawi – regressive targeting

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Primary research in GhanaVillage 1 - Upper West region-Low educational indicators-More remote-Subsistence agriculture

Village 2 - Central region-Better educational indicators-Connected to urban economy-More diversified livelihoods

In-depth individual and group interviews with-52 adult savings group members-27 adult non-members-24 children, 8 teachers, 2 community volunteers

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Context: Livelihoods- Declining ability to live off the land, some faced food or cash

shortages- Some out-migration for wage labour and salaried jobs- Children often work, whether in or out of school

Context: education- Parents have high education aspirations for children, but also

immediate need for agricultural labour, and school costs: - informal fees + uniforms + books = about USD 12-18 at primary, USD 30 at

lower secondary … much higher at senior secondary- Erratic attendance due to combination of not being able to pay fees

and having to work, more common than dropping out altogether- Many enrol overage and repeat

- Children held back until they could pass exam- Often not completing junior secondary education by 18- Eventually drop out to work or marry

When you don’t go to school they won’t even take you to be a cleaner. (adult member, female, Upper West)

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Savings groups- Oldest in third annual cycle, self-sustaining, supported by community

volunteer - Weekly savings per member: Central: USD 0.50-2.50; Upper West USD 1 –

5- Loans up to three times savings, payable within three months- some vulnerable (poorest, older people, circular migrants) not in savings

groups

Direct educational impacts- School attendance improving and some attributed to savings groups- Many took small loans to pay school fees or buy uniforms – this seen as

legitimate reason for taking loans, included in constitution of some groups- Share-outs also used, but less frequently- According to several accounts, more children were going to school, and

fewer were being sent home because of non-payment of fees or to work on farms

- In Central, some movement from public to private schooling

Now any time I go for a loan, it’s for the payment of the child’s school fees. Whenever I am spending money, I think of the savings group first which I will have to meet before any other expenses. (adult member, Central) 10

Indirect effects of savings groups on education- Several interviewees said their overall income had increased due to

investment of share-outs or loans in business, allowing higher expenditure on education

- Some support for idea that savings groups lead to improved ability to pay for health expenses and for food in lean times, and that migration – which can disrupt children’s schooling – had decreased

- Unable to determine with confidence whether child work had increased or decreased as a result of the savings groups – need for occasional work had not disappeared

- Savings groups may have placed more income in women’s hands, increasing their de facto decision making power, including over educational expenses

- Savings groups may have helped increase careful money management

I use it to hire labour on my farm which increases my productivity. I now spend more on my farm. I can now also cater for my children’s educational expenses. (adult member, Central)

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Conclusions

• Many take loans and use share-outs for education – educational outcomes harder to pin down

• Evidence from some contexts of increased education expenditure and enrolments

• Combination of gradual income improvement with better ability to pay fees on time?

• Possible indirect, longer term effects via health and nutrition

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Suggestions for further research• Child labour – risk it could increase due to savings

groups?• Longer term rigorous research needed• Need to use better education indicators including

overage enrolment• More consideration of equity effects (e.g. savings

group participation, private education)• RCTs well suited to this type of evaluation:

interventions are relatively uniform and well-defined• But large variation across contexts => don’t generalise• Smaller scale qualitative studies can illuminate

underlying processes

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Thank youStuart Cameron, Oxford Policy Management (Stuart.Cameron@opml.co.uk)Eric Ananga, University of Education, Winneba

See also:•Cameron, S. and Ananga, E.D. (2015) Savings groups, livelihood and education: two case studies in Ghana. Journal of International Development, 27, 7•Plan research report http://www.plan-uk.org/resources/documents/saving-groups-and-educational-investments.pdf •Plan research briefing http://www.plan-uk.org/resources/documents/savings-groups-and-educational-investments-research-briefing.pdf •Blog post: Savings groups can help reduce the financial barriers to education

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