Dollar for Dollar

Published in the Spring 2010 issue of SSA Magazine

Matched savings accounts have an impact in Africa

More than 14 million children have lost one or both parents to AIDS in sub-Saharan Africa, according the United Nations. In 2005, two researchers from Columbia University set out to experiment with a new way of helping.

In a rural district in Uganda, they helped a church organization set up savings accounts for orphaned adolescents still living with families to help pay the relatively high cost of high-school education and to instill hope, encourage planning and promote more responsible behavior. For every dollar a family placed in its account, the program matched it with two, and the youths, who were primary school students from 11 to 17, were mentored by university-students and given workshops on financial planning and other life skills.

The experiment worked, say the researchers, Fred Ssewamala and Leyla Ismayilova. In "Integrating Children's Savings Accounts in the Care and Support of Orphaned Adolescents in Rural Uganda" in the September 2009 issue, they report that after ten months the families saved an average of $228—enough to pay for a year and a half of high school. Compared to young people outside the program, more of the youths expressed an intention to go to high school and confidence that they could go on to college.

The idea of matched savings accounts is not new in wealthier countries like the United States. "Most people think you can't do this work in a sub-Saharan Africa," says Ssewamala, a native of Uganda. "People are poor, they say, where will they get money?" The study showed, he said, that "these families can save if given the opportunity." Families often earned money to save by raising chickens, pigs and other livestock or by appealing to distant relatives for help.

Ssewamala hopes to expand the project in Uganda, and he is working to start a program in Nigeria, where children are lured with small gifts into joining local militias. "We want to keep them in school by creating something meaningful in life," he says.
Ssewamala, Fred M., and Leyla Ismayilova. 2009. "Integrating Children's Savings Accounts in the Care and Support of Orphaned Adolescents in Rural Uganda." Social Service Review 83 (3): 453-72.