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CHAPTER 4: Knowing the village[13]

The objective of this book is to help the poor strengthen their capacity to accumulate resources that can improve their lives, by building on their existing skills and resources. Therefore, when starting a saving activity, knowing the capacity and constraints of the people and the environment in which they live is crucial. This part of the book includes some exercises that the group facilitator can do together with the people in the village to learn more about them, their village, and their resources.

Successful saving groups require that members have a common interest to save together. For this, you will need to know who’s who and who’s doing what in the village. This will help you determine which groups of people are most likely to come together, but also to ensure that you do not overlook those at the lowest income level who are often left out of this type of activity.

NOTE: Much of the information you are looking for may already be available from the local district office, non-governmental organizations (NGOs) working in the area, and local leaders. The tools included in this section are only a few examples of what you can do with the people in the village, that can help you crosscheck information you may already have and fill the gaps, as necessary. Consult the references for a more exhaustive list of tools.

Village social map - Who is living where?

You can find out who lives where by drawing with the people in the village a village social map. This map shows the different social structures such as households, health centres, schools, churches, and other major institutions found in the area. The map indicates the social and economic characteristics of the households (e.g. better-off/poor, male/female-headed, etc.). Social mapping is best carried out at the beginning of the appraisal, and can provide you with the information you may need for other appraisals, such as wealth ranking, or Venn diagram (explained further below).


Example of a village social map*

* FAO project: “Improving Household Food Security and Nutrition in Northern Shewa (Amhara region) and Southern zone (Tigray region), Ethiopia”

Who is this exercise for?

Depending on the local situation, you may want to do this exercise in separate groups of men and women to increase participation or with other groupings of people.

NOTE: Classifying households in different categories can be a sensitive issue. Social stigma may result from being classified as poor. In such a case, you may wish to restrict the participants to key informants from the village. However, one should always be cautious not to rely only on a few informants. For example, it is often that key informants belong to the better-off groups. They may be reluctant to classify themselves as such fearing that they will be left out of possible assistance. Therefore, it is necessary to crosscheck the information with other sources and compare the results.


  1. Ask the participants to draw a map of the village, showing all households. For orientation it will be helpful first to draw roads and significant landmarks of the village.
  2. Discuss whether the total number of households has increased or shrunk during recent years. If there were any changes ask why and whether this has caused any problem for certain families or for the village.

  3. Ask the participants to also show institutions and places that offer some kind of social service or which are popular places to meet (e.g. schools, churches, health service, traditional healers, local administration office, village leaders, shops, places where people frequently meet to socialize, etc.).

  4. Ask to show on the map which different ethnic or religious groups live in the area.

  5. Ask the group to indicate where female-headed households are. Make sure that everybody has the same understanding of what the characteristics of a female-headed household are.

  6. When someone has given an answer, ask the others whether they agree, disagree or want to add something. Encourage discussion throughout the exercise.

  7. If time allows you should integrate the wealth ranking at this point which is described below.

Materials needed

Large sheet of paper, pencils and colour markers. If drawing on the ground, find a soft ground and use sticks, leaves, bottle caps, beans, or any other local materials for symbols. Make sure to copy the map on paper afterwards.

Wealth ranking - Who is who?

You can find out what the different wealth categories are in a village by doing a wealth ranking. This exercise can help you characterize the different wealth groups and start a discussion on what factors are important determinants of poverty as well as well-being. Wealth ranking is best carried out immediately following social mapping in order to be able to physically locate specific households and link socio-economic criteria to the wealth categories.


Who is this exercise for?

Given that poverty and disease may go hand in hand with social stigma, the poor may resist being classified as poor. Therefore, this exercise is best done with a few key informants who know the village well. However, as mentioned earlier, one should not rely completely on information collected from a few informants. The key informants most likely belong to the better-off group and may be reluctant to classify themselves as such fearing that they may be left out of possible assistance. Therefore, it is important to also talk to other people in the village and crosscheck the results.


  1. A numbered list is made of all the households in the village (see village social map) and the name of each household head and the household number is written on a separate card.

  2. The key informants are asked to sort the cards in as many piles as there are wealth categories in the village, using their own criteria.

  3. After sorting the cards, ask the informants what criteria were used for each pile and what the differences between the piles are.

  4. Assure the informants of confidentiality and do not discuss the ranks of individual families, to avoid causing bad feelings within the village.

  5. List the local criteria and indicators derived from the ranking discussion. What are local perceptions of wealth, well-being and inequality?

Materials needed

The village social map, pencils and coloured cards or papers.

Venn diagram - Who is doing what?

You can find out about the different roles played by institutions, organizations, groups and important individuals found in a village, and their influence on the village (or target group) by using a Venn diagram. This is a tool that is used to visualize the interactions among these different actors and allows villagers to put a value to each institution in relation to its importance for the village. The diagram may also show who participates in each institution in terms of gender, socio-economic class, ethnicity, religion, etc.


Who is this exercise for?

The Venn diagram should be developed with a cross-section of the village. If time allows it is a good idea to do the exercise with separate groups of men and women, poor and better-off, etc. in order to better catch their different point of views. If this is done, the results should always be shared among the different groups at the end of the exercises to stimulate discussion and clarify eventual discrepancies.

Example of a Venn diagram*

* Ibid.


  1. Identify those organizations, institutions, groups and people, both inside and outside the village, that are important to and/or working with the village. Make sure not to forget small informal groups (village health committee, water user group, etc.). What local groups are working on environmental issues (water, grazing, land), economic issues (savings, credit, agriculture, livestock), social issues (health, literacy, religion, traditional education, sport), and political issues (farmers’ associations, women’s group).

  2. Write down all the institutions that are mentioned and assign each organization, group and individual with a unique symbol. Use symbols that everyone can easily understand.

  3. Draw a big circle, representing the people themselves, in the centre of the paper or on the ground.

  4. Discuss how important each organization is for the people and why. The most important ones are then drawn as a big circle and the less important ones as smaller circles. Compare the sizes of the circles and adjust them so that the size of a circle corresponds to the relative importance of the institution, organization, group or individual.

  5. Discuss how the village and different groups of people benefit from each organization. Show the degree of contact and cooperation among the village, the organizations, institutions, groups and important individuals. Which organizations work together? The distance between the circles shows the level of contact and interaction:

    » Large distance between circles shows no or little contact or cooperation.
    » Circles that are close to each other show loose contacts.
    » Touching circles indicate some cooperation.
    » Overlapping circles indicate close cooperation.

  6. Identify those institutions that only accept women or men as members and mark those with a common symbol for men or women.

  7. Identify those organizations in which poor people do not participate. What are the services provided by certain organizations from which the poorer people are usually excluded? Mark these institutions on the diagram with a symbol for poor. You might also ask if there are other groups of people that are excluded from some of these services.

  8. Identify those institutions and groups that address savings and credit issues. In what ways are they addressing these issues? Mark the mentioned institutions with a common symbol.

  9. Only if time and the motivation of the participants allow, the group may discuss the strengths and weaknesses of those institutions that were reported as most important.

Materials needed

Large sheet of paper, pencils and colour markers. (It may be easier to cut coloured papers into circles and stick them on the large sheet to allow easy changes as discussions arise). If drawing on the ground, find a soft ground and use sticks, leaves, bottle caps, beans, or any other local materials for symbols. Make sure to copy the diagram on paper afterwards.

CHAPTER 5: Money management[14]

Successful saving groups show a high level of group spirit, good communications and good record keeping skills. Decision-making in the group should be participatory and each member should feel ownership to the group and its activities. This requires that all members understand their role and rights as a member.

Particularly for saving activities, each member should be able to manage their own money and understand how their contribution to the group will be beneficial to them. That’s why each group should emphasize member education. The more educated members become, the more they will be in control of their own development as a group and as individuals.

The following are exercises that can be done with the group to raise awareness about money management. An in-depth analysis of where money comes from and goes to can help people prioritize better their spending, plan for future expenditures, and by consequence save more efficiently.

Household economy map

A household economy map shows an overview of where money comes from and where it goes for one household. It describes the different economic activities undertaken by the different members of the households.


To get people talking about all the ways they generate income and satisfy their basic needs.


  1. Start by drawing a house in the middle of the map.

  2. Ask the household members to list the different economic activities they are responsible for and draw them around the house. Include both earning and spending activities.

  3. Discuss the role and interdependence of different household members.

  4. Discuss the existence of conflicting demands which necessitates choices being made.

  5. Discuss the relative importance of different activities. People may have different opinions about this. It may be useful and interesting to draw different maps for different household members and compare the results.

  6. Discuss what they like and dislike about different activities and what they would like to change if they could.

Example of a household economy map

Cash flow tree

A cash flow tree shows the different sources and uses of cash in a household. It is another way of visualizing income and expenditures to get people thinking about their spending and saving patterns.


To get people to identify all their sources of cash income and think about the ways in which they need to spend money.

Example of a cash flow tree

Other possible sources of cash might include: wages or a pension, rent income, receiving gifts, selling assets, loans or remittances from relatives.

Other possible uses for cash might include: paying rent or tax, saving, replaying loans or lending money, giving gifts.


  1. Draw a tree like the one shown above.

  2. Explain that just as water is drawn into the roots, up the tree and along the different branches, so money comes into a household and has to be channelled towards a variety of expenditures.

  3. Ask participants to label the roots with their different sources of cash income and label the branches with different types of expenditures.

  4. Ask them to put the most important items on the lower branches and those of less importance on the higher branches. This generally leads to much debate and differences of opinion. Women will have different views from men and older people may differ from younger ones. It may be useful and interesting to get different members of the household to make separate versions and compare the results.

  5. Discuss the competing demands for money and how choices are made. Who decides what money should be used for? This is important when people have different opinions about what is important to spend money on. You need good gender awareness to handle this topic.

  6. Can one type of cash income be singled out for one type of cash spending? The answer should generally be “no”, as income flows are diverted to whatever need is most pressing on any particular day. This is why it is silly to imagine that loan repayments will be made from one particular income source and this partly explains why people fail to make loan repayments.

  7. Discuss the relative importance of each source of cash income. Ask participants to allocate different numbers of beans or seeds to the different sources. You could then count the beans and ask the people involved in the discussion to allocate this number of beans to the different expenditures.

  8. Where is the money kept when it is not required immediately? This information is useful for initiating discussions about where and how people save money and the problems that they see in this (safety and accessibility).

Seasonal calendar

Money needs vary from month-to-month, depending on family obligations, harvest and planting season requirements, etc. Knowing more about these seasonal changes will help people allocate and save their resources more efficiently to smooth out yearly consumption needs.


To get people talking about the changes in cash income and spending needs throughout the year.

Example of a seasonal calendar


  1. Draw a calendar as shown above.

  2. Ask participants to list the different sources of income on one side and the expenditures on the other.

  3. Ask them to place small stones or beans across the months to represent when money is received from the different sources when it is spent on the various items. The number of stones or beans placed should reflect the relative quantity of cash involved in comparison to other months.

  4. Discuss how well the cash income matches the cash needs.

  5. When is cash needed most and how do people cope with this?

  6. When is cash most abundant and what is done with the money that is not needed right away?

  7. What kind of unexpected cash needs might arise (medical fees, funerals) and how do people cope with these?

Counting and basic calculations

Having members who can read, write, and count makes group saving easier. Unfortunately, in many countries, poor people often have only limited skills in this area. Use a group saving approach that all group members can understand and follow, but do not leave things as they are. The group should continuously encourage its members to learn and improve those skills.

Start simple. Focus first on improving functional counting skills, giving all members enough training to satisfactorily conduct their group saving activity.

It’s usually easier to motivate people to learn how to count since this is a problem most encounter on a daily basis, at the market, when paying taxes, etc. After learning how to count, newly trained people will feel more confident to learn how to do simple calculations.

NOTE: Teaching numeracy and literacy can be very time consuming and may not be practical for many group facilitators. It is often better to get good counting and literacy training from a local teacher, an experienced trainer or others who have experience in this field. If you would like to take on this role, a good resource book with exercises for teaching basic numeracy is the FAO ‘Figures for Bookkeeping’.

CHAPTER 6: Planning for growth

Saving is all about preparing for a better future, but it is also about growth. The more savings we can set aside for the future, the more equipped we will be to cope with emergencies, social and economic responsibilities and take advantage of investment opportunities that can generate more resources.

Savings can be used for consumption purposes, emergencies, or productive investment to improve the family’s income. Productive investments can range from starting a small enterprise, purchasing land, livestock or farming equipment, to other small income generating activities, such as growing vegetables, weaving baskets, etc.

But before starting any such activity, the most fundamental question one must ask is whether this activity will be profitable. Careful analysis should be made about one’s skills and resources and the environment in which s/he plans to do this activity.

The following are some tools that can be used in identifying and planning for an income-generating activity.

Strengths, weaknesses, opportunities and threats

When planning an investment (such as starting a small business), it is extremely useful to know what the village/group can do on its own and where outside support is needed. Often, the simple realization of one’s own strengths and shortcomings is enough to get development moving again without creating dependence on external assistance.

Analysing an individual/group/village’s internal Strengths and Weaknesses and the Opportunities and Threats, which may come from outside, can help in deciding what needs to be done. This is often called SWOT analysis from the first letter of each word. Strengths and weaknesses include such things as what the group or individuals in it are good at (strengths), or not good at (weaknesses). They are the things that are within the control of the individual or group.

Opportunities and threats are those issues which are outside the control of the group or individual but will still have an effect either positively or negatively. For example, a new road being built may give better market access (an opportunity) or new laws may make it more difficult to start a business (a threat). In some cases a change may be both a threat for some reasons and an opportunity for others.

NOTE: The steps below refer to a group but can also be used for individuals or a whole village community.


To develop strategies that can be used to plan concrete objectives and activities.


  1. Set the objective. What does the group want to do?

  2. Ask the group members to list the strengths of the group. Strengths are internal characteristics that contribute significantly to achieving the group’s objective. They may include group savings, different skills of individual members, knowledge, social networks, maturity of the group, past experiences, etc.

  3. List the group’s weaknesses. These are points that can make the group less effective or prevent opportunities from being taken up. They can include low levels of literacy, lack of a strong reason to work together, immaturity, tensions and conflicts, etc.

  4. List opportunities in the area. An opportunity is something external that, if taken advantage of, can help achieve the group’s objective. Examples are market opportunities such as tourists, new businesses, working mothers - or services/goods wanted or needed by the village.

  5. List the threats. A threat can be something external to the group that has or can have a negative impact on the group. These can include existing businesses which would be competitors, changes in the number of members due to illness or death, other organizations providing similar services, changes in members needs or market trends, etc.

  6. For each opportunity and each threat, come up with a suggestion that would take advantage of the opportunity or reduce the threat.

  7. Select the 4 or 5 best options as agreed by all the members.

  8. For each of the options, discuss which strengths could be used and which weaknesses need to be reduced to realize this option.

  9. Select 2 or 3 options which have the most strengths and relatively few weaknesses.

Business plan[15]

Once the activity has been selected the group should make a careful plan of what it will need to do. The group should have an idea of the feasibility of the activity and can decide whether to go ahead.

Feasibility checklist

Ö What is needed to run the business? The list could include: materials, labour, skills, equipment, time, buildings, land, transport, licenses, legal requirements, etc.

Ö Where will it all come from? Local supplier? Outside supplier? What would be the transport cost?

Ö What will it cost to produce what the business wants to sell?

Ö What price will the group charge for the product/service? Will this cover the cost? Will this be too high for people to buy it?

Ö How will the group finance the business?

Ö Who will buy the product/service?

Ö Who else is selling similar product/services?


To prepare and organize an income-generating activity (business) so that time and resources are allocated to give the maximum profit for the minimum cost and risk.


  1. Separate start-up and running costs. Start-up costs are things which must be done before making anything (land or shop rental cost, equipment purchase, initial input, etc.) and running costs are things which must be done continuously while the business is operating (buying input, processing, packaging, selling, storing, record-keeping, etc.).

  2. Decide on who will do what. Everyone in the group should be involved in some ways, while a few members should coordinate specific aspects of the business (supply coordinator, production coordinator, marketing coordinator, accountant, manager, etc.)

  3. Agree on rules for the group business. How profits will be shared according to contributions of members (in money, time, resources), what happens if the business makes a loss, what happens if a member decides to leave, how arguments will be settled, etc.

  4. Decide how big the business will be. The size of the business should depend on how many customers there are and how much the group can afford to invest in the business. It is best to start small and grow as the group makes profit and gains experience.

Participatory monitoring and evaluation[16]

Planning is about knowing what is likely to happen in the future and preparing for it. If the group has a good idea of what is going to happen in the future, it can better prepare to defend itself against new threats or to take advantage of new opportunities that arise. This is why regular monitoring and evaluation of the group is essential for the development and growth of the group.

Group monitoring

Monitoring means keeping track of what the situation is, what is being done or what is being accomplished on a frequent basis. This may include maintaining and periodically reviewing regular records of group decisions, actions and finances, and checking that actions are taken according to plan. The facilitator can use a simple monitoring chart to help group members monitor progress and problems in their activity.


  1. Prepare a sheet of paper with four columns.

  2. Discuss with the group which activities they feel are important for their group. List the activities in one column.

  3. Write in the second column the result or current performance of each activity.

  4. Ask the members whether they are happy or unhappy about the results of each activity. Discuss problems and opportunities they encountered.

  5. Once the members have reached agreement on the results, ask them to represent their judgement in the third column using numbers or happy/sad faces. Use a four-point scale, such as:

  6. Discuss what will be done next for each activity and write them down in the fourth column.

  7. Repeat this exercise regularly (at least once a month).

  8. If the scores for some activities are consistently low, then the group should find a different way of dealing with those weak areas.

  9. Many other aspects of the group and its activities should be monitored, such as regularity of holding meetings, attendance of members in meetings, and participation at meetings, sharing of responsibilities and decision-making, etc. The process of selecting the indicators should be done in a participatory way with the group members. The aim is to collect the most essential information to assess the group’s performance.

Example of indicators for a monthly monitoring of a self help group in India[17]

  1. Preparation for meetings: activities include cleanliness and arrangement of lamps, drinking water, sitting, monitoring chart and a clock.

  2. Regularity of meeting.

  3. Timeliness.

  4. Attendance in the meeting.

  5. Recording the minutes of the meetings.

  6. Savings: deposited on the fixed date.

  7. Account keeping for transparency.

  8. Collective decision-making: members participate actively in the meeting.

  1. Repayment of loans: for the credibility and sustainability of the groups.

  2. Lending: to meet the credit requirement of the members.

  3. Petty cash: for refreshments, notebooks, pens and emergency needs.

  4. Insurance: against damage to the life of member or the assets.

  5. Community activity: discussion and action on social issues such as public health and sanitation, adult and functional literacy, tree planting, drinking water, voluntary labour contribution, or gender issues, mainly to create social awareness among group members.

Group evaluation

Evaluation on the other hand is done less frequently, usually only at the end of a fixed time period, to assess whether the group and its activities achieved their objectives and to identify possible improvements. This should be done at least every six months, but can be done more often. It is essential that the group is able to evaluate itself using its own criteria for strengthening its ability to meet members’ needs.


  1. Develop with the group a series of questions to evaluate the group’s performance. For example, to measure the extent of work sharing within the group, ask: “How is group work shared among members?”

  2. Formulate each question with four possible replies: (a) is the most satisfactory situation with little room for improvement (3 points) and (d) is a very unsatisfactory situation with much room for improvement (0 point).

  3. The group members then have to agree amongst themselves which of the following four answers best describes their group.

  4. Once agreement is reached, check the appropriate box on the right and then proceed with the next question. Evaluations should be done regularly (at least once every six months) and the results compared with the results from the previous period to see if real progress is being made.

  5. The group should then select a number of priority areas and draw a plan of action to improve the group’s performance, taking into consideration appropriate allocation of available resources.

  6. Possible areas of evaluation could include how well meetings are attended, how productive the meetings are, how much cooperation there is among members, how much savings are being accumulated, are loans being repaid on time, are members acquiring new skills, etc.

Example of evaluation format

(a) Group work is clearly and fairly shared among all members



(b) Group work is carried out by most members


(c) Group work is done by some members


(d) Group work is not clearly or fairly shared


[13] Tools adapted from Callens, K. 2002. Methodological Guide: Participatory Appraisal and Analysis of Nutrition and Household Food Security Situations and Interventions from a Livelihoods Perspective. Rome, FAO. (Draft)
[14] Tools adapted from Heney, J. 2000. Talking About Money. Zambia, FAO.
[15] Adapted from FAO. 1995. The Group Enterprise Resource Book. Rome.
[16] Adapted from FAO. 1994. The Group Promoter’s Resource Book. Rome.
[17] Khadka, S. 2001. Participatory self-monitoring system: The Maharshtra Rural Credit Project. In IFAD et al. Resource Book on Participation, pp. 191-198. Manila, IIRR.

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