From Informal to Investable

In rural Kenya, Margaret’s savings group helped her push past subsistence, growing her dairy cow herd from two to five. But a severe feed shortage in 2024 caused her milk production to collapse. The savings group helped, but their pooled fund wasn’t enough. That’s when the group accessed a $231 MFI loan that helped restore her herd within weeks. “The loan was a lifeline,” she said. “It reminded me that I am not alone—my group and the FAST savings group loan were my safety net.”

Linking savings groups to financial institutions

Banks and MFIs have long bypassed women nano-entrepreneurs (self-employed women running one-person enterprises) like Margaret, who were deemed too expensive to serve profitably. But by meeting these women inside their trusted savings groups with digital tools, financial institutions are achieving what once was impossible – sustainable delivery costs, high repayment rates and rapid growth – all while reaching segments that traditional lending has missed.

The demand for these savings group linkage loans is clear. Women nano-entrepreneurs are already borrowing, just not from formal institutions.  They mostly borrow from their savings groups, but demand for loans in both quantity and size usually exceeds the supply of funds available for lending for much of the cycle. 

Savings group linkage loans meet this unmet demand by channeling capital through savings groups.  Unlike traditional solidarity loans, where banks form new groups solely to guarantee repayment, linkage products build on the trust, savings discipline and social cohesion found in long-term savings groups. They preserve what women value in informality (flexibility, speed and trust) while adding what informal finance often lacks: larger loans and products that offer resilience to local shocks. 

Two distinct linkage models are emerging, both of which leverage mature, dense networks of savings groups alongside digital tools like mobile money to manage last mile costs and risks. 

The credit-led linkage model

In the credit-led model, typified by VisionFund’s FAST (Finance Accelerating Savings Group Transformation) product, groups borrow collectively – typically around $1,500 per group – and repay through their existing meetings. The process feels familiar to clients like Margaret. Her group still meets, decides together how to use the loan, and repays as a unit. But behind the scenes, a formal financial institution is quietly becoming part of her journey. 

FAST now reaches more than 391,000 clients (76% women) and represents 59% of VisionFund’s total client base in Africa. Its portfolio doubled year-on-year in 2025, reaching $13.6 million, with PAR30 (portfolio at risk over 30 days) consistently below 1%. A standardized delivery model built on community-based field officers, streamlined group assessment and mobile money disbursement allows most FAST operations to approach break-even within roughly 18 months.

The savings-led linkage model

The savings-led model, exemplified by NMB Bank's Kikundi platform in Tanzania, starts by linking existing savings groups to low-cost digital accounts, allowing members to safely deposit and withdraw funds while maintaining the group’s collective discipline. Once groups demonstrate consistent behavior, NMB gradually extends access to credit, starting with small individual loans of around $50 to $200 and scaling up to several thousand dollars as trust and data accumulate. 

Today, Kikundi connects more than 1.2 million savings group members, most of them women, offering a digital pathway from informal savings to formal financial inclusion.

Growing reach and acceptance of savings group linkages

Both models are reaching segments traditional finance misses. VisionFund's FAST serves clients poorer than typical MFI borrowers. And NMB’s Kikundi reaches more rural populations than the bank's average customer base. 

Linkages are proving commercially viable in two critical cost categories: distribution costs and default risk. Group-based delivery, supported by mobile money and digital records, cuts client acquisition and servicing costs, while collective accountability keeps repayment rates high. Leaders across MFIs and banks are recognizing linkages not just as a social project, but as a strategic business line. 

A call to action for supporting savings group linkages

FAST shows what disciplined, field-led execution can achieve at scale, while savings-led models like NMB’s demonstrate how digital, low-cost accounts can create alternative pathways. While the landscape is still early and uneven, this is the moment for the ecosystem to lean in: 

• Investors and funders can accelerate commercial viability by backing the early, expensive stages and offering patient or blended financing that helps keep pricing affordable for groups while building the volume needed for full commercial sustainability. 
• Banks and MFIs can take bigger bets on adopting linkage models to reach underserved segments through products that protect, rather than dilute, the integrity of groups. 
• Governments, funders and policymakers can recognize savings groups as legitimate semi-formal actors and support the enabling rails - dense and mature groups, registries, credit reporting, and interoperable payment systems—that reduce cost and risk.

At the same time, we urgently need a second generation of evidence. We still don’t know how quickly groups can absorb different linkage products, how many members will want or be ready for individual credit, or exactly how digital tools reshape unit economics. Comparative research on women's preferences, and how different models impact the integrity of groups, is necessary and will help the sector understand where each works best and what responsible growth looks like for women.

Linkages can scale. But doing so requires intentional investment and a commitment to learning.  If we act now, we can move to a mature, competitive market serving millions more women.