Savings Start
The Savings Start program is part of a comprehensive approach aimed at alleviating poverty through asset development. Individual and community assets like small businesses are indicators of strong, self-sufficient families and neighborhoods. Savings Start provides a framework for small business owners to create or expand their micro enterprise while integrating a support network of community partners that program participants might not otherwise have access to. Long term saving habits, credit management, and business development are focus areas of the financial literacy curriculum included in the Savings Start program.
In addition to attending these regular training sessions, program participants are connected to community partners who offer support and guidance while participants create a business plan, make monthly deposits into a customized bank account, and ultimately acquire new assets for their small business. Once the program requirements have been successfully met, participant savings are matched 1 to 1 by the program from the money donated to the fund, administered by Comunidad Connect. Participant savings and the matching funds are then used to purchase assets for the respective small business in accordance with the participant’s business plan.
Comunidad Connect brings together small business owners and donors in the Savings Start program, which combines a savings account with financial training classes. The resulting micro-enterprise development is beneficial to participants and donors alike.
A Savings Start Example
The participant is able to save $25 per month. The funds enter a controlled bank account and cannot be withdrawn with out an approval by program administration. As the participant makes monthly deposits, he/she also attends monthly training sessions on financial planning and business management.
Once the participant reaches his/her savings goal and completes the required training, the savings are matched 1:1. Therefore, if the savings goal is $300 within 12 months, the participant will be able to withdraw $600 from the controlled bank account to use in accordance with the business plan designed at the beginning of the program.
This money is not a loan and does not need to be paid back. With the multiplied funds the participant will significantly improve and expand his or her enterprise. They will also have established a habit of savings, which carries over to other aspects of life such as preparing for the education of children, long-term financial planning for the family, managing credit/loans in the future, and participating in the national banking system.
Savings Start Community Partners
Each community partner provides a unique service to the program. Below is an overview of the roles and responsibilities of community partner of the Savings Start program.
1 - Banking Partner:
- The banking partner creates and manages a controlled savings account for each participant. Participants are allowed to make deposits, but can not withdraw any funds without the permission of the program administrator. According to the partnership agreement, the banking partner is required to give a monthly report to the administrator of all participant saving activity to ensure compliance with program policy.
2 - Financial Literacy Partner:
- The financial literacy partner provides a series of trainings designed to increase participant knowledge and proficiency in personal financial management. This includes individual counseling sessions, as well as classroom-style workshops. The financial literacy partner monitors participant deposits and addresses any issues that develop during the cycle of the program.
3 - Business Training Partner:
- The small business partner provides counsel and guidance to each participant as they develop their own business plan, while also providing capacity building workshops. Training components such as database management, basic English, marketing, and customer service are vital to a well-rounded small business training curriculum.
