There are a number of obvious benefits in providing facilities that enable herders to save money. First of all, a pastoralist who can show that he/she regularly saves money has a much better chance of obtaining credit on reasonable terms. Secondly, by diversifying assets into both animals and money, herders pursue a safer risk management strategy that enables them to cope better with drought, disease or natural disaster. And, finally, if assets are kept as money in banks rather than as livestock on pasture, the pressure on the range is reduced and there is less likelihood of land degradation.

During implementation of the National Livestock Project in the Central African Republic, it was the pastoralists themselves who expressed the desire for saving facilities, and, as a result, a savings and credit component was incorporated into the subsequent Livestock Development and Rangeland Management Project. Although the project was subsequently suspended due to political unrest, the intended approach involved the formation of mutual savings and credit groups. In most cases, such groups are much more likely to be both accessible and user-friendly to herders than are banks in far-off cities.

Relevant IFAD Projects