1. INTRODUCTION Since 1992, CRS has provided microfinance services to rural and unbanked populations in Benin with the support of the implementing partner, Caritas Benin. In 2006, CRS adopted the Savings and Internal Lending Communities (SILC) methodology, based on an accumulated savings and credit association (ASCA) model, with an internally managed loan fund. SILC groups become independent or “mature” after one cycle (generally 12 months), at which time they no longer receive external support. There are currently over 765 functioning SILC groups in Benin. In addition to a loan fund, SILC Figure 1 Target communities in Natitingou and Kouandé promotes the creation of a social insurance fund, known as the “social fund.” Members regularly contribute to the social fund and can access it in a time of need. 1 Although each group sets its own rules, the loan fund typically has a fixed interest rate and repayment period, while the social fund functions as an interest free grant. 2 Many groups use their social fund to help defray unexpected health costs, including transport to health centers, cost of consultations, and cost of medications. However, the social fund grant is rarely sufficient to cover all costs. As such, SILC members often borrow from the group or from friends and neighbors to pay the difference (Sawyer, 2011). To better manage health costs, SILC members in the Atacora region of northern Benin (Figure 1) considered joining health mutuals, a form of community-based health insurance that is popular in Benin. SILC members; however, reportedly felt unwelcome at the regional health mutuals, which were far away and lacked the solidarity of SILC groups. The SILC groups asked Caritas Natitingou and CRS to transform their savings groups into health mutuals. Health mutuals take many years to form and become independent, and additionally, can fail due to internal shocks to the group. Instead, CRS proposed partnering with a private
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For more information on SILC methodology, please see (Vanmeenen, 2010) http://issuu.com/catholicreliefservices/docs/voices_from_africa?mode=window&backgroundColor=%23222222. 2 Exceptions include groups that give interest free loans from the loan fund under specified circumstances; e.g., health emergencies.
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