Self-help groups in Ethiopia

‘Whenever I think of my group, the love and the sisterhood fills my heart with joy. I will never forget what the group members have done for me. I believe whatever happens in my life, I will get through it using my savings,’ says Tsige Yiluma in Ethiopia.

With eight children to look after and her husband bedridden due to a car accident, Tsige found herself carrying a tremendous and frightening responsibility. Surviving on just 117 Birr (US$1) a day, the family had little food and the children would often go to school hungry.

At first, Tsige took out a loan from a money lender, but the high interest rate and the lack of a regular income to pay it back meant this was not a viable option. 

After starting work as a labourer, Tsige met with people from Tearfund partner Kale Heywet Church. They encouraged her to join a self-help group and she started saving a small amount of money each week.

With the help of the group, Tsige took out a loan that enabled her to sell chickpea flour, oatmeal flour, barley flour and peppers. She began to pay back what she owed to the money lenders, but then she broke her wrist and could not work for a few weeks.

The group surrounded her with love and care and helped to look after the children until she was able to work again. 

Eventually she managed to pay back all the money she owed, and she now has a thriving business. 

Small beginnings

Based on learning from India, Kale Heywet Church first introduced self‑help groups to Ethiopia in 2002. 

Initially, five groups were formed with about 100 members in total. The members agreed to begin saving just 1 Birr a week, and before long they were able to borrow small amounts of money for household needs or to invest in small businesses. 

Enthusiasm for the approach grew rapidly, and by the end of the first year there were 34 groups. The number of groups has continued to grow and there are now thousands of groups across at least 20 countries. 

The groups meet weekly to save money, discuss issues, find solutions to common problems and build trusting and supportive relationships. Many groups are women-only; some are mixed or men-only. The groups are financed entirely by member savings.

Ownership

The self-help group approach addresses poverty at the household level. It focuses on each person’s potential and helps them to discover more about themselves. 

The group members hold all of the decision-making power, resulting in a sense of belonging and ownership. For example, when members apply for a loan, applications are considered by the whole group and decisions are made by voting. 

The ability to save and make loans brings independence, dignity and self-confidence among group members. In places where people have tended to rely on help from outside, self-help groups bring freedom through self-discipline and mutual support. 

Within two to three years, members are often able to send their children to school, cover healthcare costs, enjoy more nutritious food, improve their houses and start small businesses.

Structure

As they mature, groups sometimes decide to develop whole-group enterprises such as making handicrafts to sell, or agricultural cooperatives. They may also begin to take the lead in community initiatives such as tree planting, vocational skills training, plastic recycling, adult literacy, and hygiene and sanitation campaigns. 

When there are 8 to 12 groups in an area, they might decide to use some of their savings to set up and maintain a cluster-level association. These provide technical support, training and help with conflict resolution. 

Several clusters might then come together to form a federation-level association. These can help groups to gain legal recognition and access government schemes such as social security, training and business grants.

This structure helps the groups to become self-sustaining and self-governing. It also means they can use their own resources to set up and support new self-help groups.

Federations sometimes use pooled resources from multiple clusters to take on big activities such as opening training centres, schools or clinics. Many aim to bring about significant social change such as reducing gender-based violence by raising awareness and advocating for women’s rights. They might call on local authorities to provide better services, such as education or water and sanitation, and hold them to account if they fail to keep their promises. 

Fundamental to the success of self‑help groups is a profound belief in the potential of each person, no matter how challenging their personal situation may be, to solve their own problems with support from the group. This belief is the vital starting point from which everything else can follow.