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Managing Finances Through Internal Savings and Lending

posted May 26, 2011, 11:48 AM by Andrea Bohn
     by Catholic Relief Services  
This skill set includes the ability to save regularly, to manage these savings so that they are protected, to lend group savings to members of the group at a reasonable interest rate. The group should be able to follow and enforce its own rules so that savings and lending decisions of the group are transparent to the group as a whole. The building of financial management skill opens up opportunities to link eventually to formal sources of finance.

Learner Objectives

Following the course, the field agent will be able to explain how farmers can:
  • Better manage their own money for productive as well as non-productive uses
  • Recognize what financial resources are available to them, and which solutions are appropriate and affordable in meeting their financial needs
  • Negotiate appropriate loan terms to support their productive investments
  • Improve basic bookkeeping skills, including the ability to do basic financial record keeping
  • Facilitate, deliver and effectively manage the three periods that make up a group internal savings and lending cycle.

Sections and Lessons

Section 1. Financial literacy

Lesson 1. Money/ financial management and budgeting. Farmer finances are both for agricultural production and for non-productive household-level expenses. In this lesson the field agent enables farmers to determine how they currently spend money, and how they would prioritize spending if they had more or less cash at the household level.
Lesson 2. Types of financial services. Provides decision-making support to farmers to enable them to research a number of financial service options and decide what (or what combination) is most appropriate for them.
Lesson 3. Financial negotiations. Helps farmers individually and collectively learn negotiation skills in acquiring financial services. The lesson will be framed as a case study, using a ‘situational’ approach or role play.
Lesson 4 and 5. Basic bookkeeping I & II. Basic bookkeeping is essential to enable farmers to track expenditures, income and profits. Skills from these two lessons will be directly linked to the business plan and profitability analysis that is part of the linking farmers to markets and agroenterprise development course.

Section 2. Sensitizing community leaders and members to the SILC approach

Lesson 1. Presenting the SILC approach to communities. Explains how to sensitize community leaders to the benefits of the Savings and Internal Community (SILC) approach and how the approach is delivered, with the objective of achieving permission and support of community leaders.
Lesson 2. Presenting the SILC approach to community members. Prepares field agents to introduce the SILC methodology to community members for them to decide whether they want to begin a SILC training process.

Section 3. Building strong and cohesive SILC groups

Lesson 1. Individual self screening. Provides the means by which members will self-screen and decide on who will form part of the SILC group.
Lesson 2. Groups, group formation and governance. Defines conditions and characteristics of active, empowered and sustainable groups. Identifies the responsibilities of their members and a governance structure.
Lesson 3. Member responsibilities, management committee, elections. Determines responsibilities and define qualities of SILC Management Committee leaders, which leads to the election of Management Committee with desired qualities and capacities
Lesson 4. SILC constitution, savings, safety of group assets. Illustrates the importance of a written constitution and its use, the importance of documentation. Determines minimum and maximum savings and decide how and when to acquire SILC tools
Lesson 5. Loan fund policies, social fund policies. Sets policies and procedures related to loan fund management and policies and procedures related to social fund management.
Lesson 6. Meetings and constitution finalization. Sets policies related to meeting attendance, finalizes the SILC constitution, and agrees on how to share and use the SILC constitution.
Lesson 7. Written record-keeping and SILC meeting procedures I. Assesses the purpose and benefits of SILC record-keeping, the steps and sequence of conducting an efficient SILC meeting. Explains how to conduct a savings meeting with transactions, and fill in selected sections of the SILC ledger book and how the SILC meetings are evaluated.
Lesson 8. Written record-keeping and SILC meeting procedures II. Explains how to conduct a savings meeting with transactions, fill in selected sections of the SILC ledger book. Identifies helpful group behaviors and previews procedures for end-of-cycle share out.
Lesson 9. Share out meeting. Determines what to do with the SILC groups’ remaining Social Fund. Illustrates how the Secretary calculates member savings and earnings, receives the savings and earnings for the cycle, and analyzes the cycle’s financial performance. Decides when and how to analyze the completed cycle.

This is Module 3 of the course suite on

"Preparing Farmer Groups
to Engage Successfully with Markets"

This module is intended for face-to-face delivery
  • The course material, additional resources, and assessment tool will be attached below.
  • The video lecture will be made available at
    Simply set up a free account, place the course in your cart and get started! The courses are offered free of charge.

Expected Completion Date

End of September 2011


These courses are developed for field agents that facilitate community agricultural development processes and impart knowledge and skills to smallholder farmers and other rural actors on how to produce profitably and sustainably.

Learning Objectives of the Course Suite

After receiving this set of courses, the field agent will be able to plan and implement a series of inter-related trainings to build farmer and other rural actors’ skills in 5 critical areas for successful engagement with markets.

Key References for This Module

  • CRS. 2010. Savings and Internal Lending Communities. Field Agent Guide. Version 4. Catholic Relief Services. Baltimore, USA.

Time Required to Teach This Module

Each lesson will be structured to be delivered in about 2 hours, so the estimated total time required for this module is 32 hours.