Serve the poorest clients-
Reflecting CRS’ goal to promote s
ocial and economic justice, we focus on the poorestcommunities and entrepreneurs. Women make up the majority of our clients, as they generally have the least means andaccess to credit.
Link loans to savings-
We connect the size of a client’s loan to the amount of that client’s savings, to ensure that they are building
wealth as they borrow.Use solidarity guarantees-Group-guaranteed loans replace collateral. Solidarity guarantees work by linkingnew loans to on-time repayment of past loans. A self-selected
group of clients guarantee each other’s loans with the understandingthat no one in the group will receive a new loan until each member’s previous loan is repaid.
Practice participatory management
Clients are directly involved in the management and administration of the services they receive, from voting on loan applications tocollecting payments from other borrowers. In this way, CRS guarantees the inclusion of those most affected by these majordecisions.
Invest in scale and self-sufficiency
Investing in research, design, staffing and training from the beginning of a program, and throughout later stages of growth is crucialto successfully moving a project from start-up to formalization. Achieving scale (i.e., reaching at least 5,000 clients per partner)advances our mission to serve the poor. We achieve self-sufficiency through efficient operations and by charging interest at marketrates.
Plan for permanence
Prior to launching a new microfinance project, CRS plans the project’s evolution into a sustaina
ble resource for the poor.Permanence may include creating a formal financial institution, helping partners transform programs into specialized microfinanceinstitutions or consolidating pilot activities into larger local entities.
formal financial s
Sustainable finance in poor communities
CRS developed its community-based savings-led initiatives to reach a large group of extremely vulnerable poor people with limitedsavings and borrowing capacity
especially women in rural communities. Group members make regular savings deposits and are
able to borrow from the group’s pooled resources; loans typically range from $5 to $30. CRS has demonstrated that these savin
gsgroups are especially effective in bringing financial services to people living in very poor, isolated areas. The model is highlyreplicable and sustainable. It builds on existing community relationships and fosters the mutual trust necessary to maintain integrityand responsibility in borrowing.
CRS’ outreach through savings
-led initiatives has seen significant growth. Savings by members ofthese groups increased 43% from 2006 to 2008, to $1.5 million (figure 1). Over the same period, participation grew to nearly800,000 people. While India predominates in terms of deposits and membership, growth is being driven by expansion in Africa,which has gone from 2,700 to 69,000 members with $573,000 in deposits.
CRS’ experience has shown that the savings
-led model integrates well with projects that target people living with HIV/AIDS or theircaregivers, orphans and vulnerable children, agroenterprises, water and sanitation programs, and education initiatives. Weemphasize collaboration across program sectors to meet the range of community needs.