Reviving savings in farming cooperatives

Farming cooperatives in Myanmar were largely reliant on a 10-year loan from the Export-Import Bank of China (EXIM) – which makes up 92% of their assets. With the loan set to expire, a new source of funding was necessary. CDF contracted 17 Triggers to help ensure the co-ops future ability to fund loans by encouraging members to increase their current deposits. Given the troubled history of the Myanmar Kyat, locals prefer to buy gold or other assets that can be liquidated when the need arises.

17 Triggers arrived in Myingyan to research the financial needs and saving and spending habits of farming co-op members in 2 townships in the Dry Zone. Field research was focused on how co-op members access money; how crop and harvest seasons affect their ability to save, borrow, or repay; and finding motivational triggers to start a new kind of savings behaviour with their co-ops.Understanding seasonality is key to design for onion farmers.

No savings accounts met farmers’ needs

Our initial assumption was that there would be a behavioural challenge in moving people away from buying gold jewelry and toward saving at a cooperative. They were already aware that liquidating their assets such as their gold or their motorbike would be at a loss with their money lenders or changers. We found in reality that people were already likely to save (a vendor proudly showed us his money box), but there was no current viable process for them to do so with their co-ops. Farmers were interested in saving.

Farmers were already prone to over-indebtedness because of their seasonal cash flow (the current loans available did not fit their needs, since repayment cycles did not match when they had income). Other co-op members such as market traders or daily wage earners had different needs around financial products, as well. The co-op was not offering financial products that farmers could take advantage of.Using participatory tools to understand short and long terms savings goals.

Listening to what they need and when they can pay

The team teased out what would make people start saving through the iterative design and prototyping process, and honed in on 3 kinds of savings accounts that appealed to the farmers, even including one for children. New savings products were hooked to better loans, so that savings with the co-op over time would help them secure loans in the future. The products developed were: a capacity-based, flexible-term loan for farmers, and a trader loan where members could repay monthly capital plus interest.

CDF would eventually turn the recommendations into actual financial products. In the meantime, the 17 Triggers team worked with the local co-op staff who would manage these products, helping them understand their target audience, anticipate needs and issues, plan the launch of products, and deliver excellent customer service.

A fresh boost in cooperative membership

In the first 3 days, 677 accounts were opened (415 women and 262 men), 358 new co-op members were recruited, with $3,000 in initial deposits. The strength of the CDF team and products tailored to the end users, made the pilot a success.