This page describes SafeSave's three main savings and loan services. In addition, in a limited number of areas, SafeSave also offers a radically experimental product, 'P9', which is described in full on the P9 page.
SafeSave offers a savings account to anyone living within walking distance of a branch office. Clients come as individuals: there are no groups nor guarantors for loans, and no meetings to attend. Clients may be men, women or children, though children under 16 may not borrow. Product rules are issued in writing in simple Bengali to all clients, to ensure that service is fair and consistent, and a complaints phone line is open at all times during working hours.
Passbook Savings: Clients may deposit as little as one taka ($0.012) when the collector calls at their house each day. Accounts with balances above a minimum level earn 6% annual interest. Clients may withdraw up to 500 taka per day ($6) at their doorstep, or up to 5,000 taka per day ($60) at the branch office within a guaranteed maximum of 10 minutes (larger amounts within 24 hours).
Long Term Savings: All clients may also open a longer-term 'commitment savings' account. Savers deposit regularly for a defined term of up to ten years and receive higher rates of interest. Clients may borrow against their long-term savings at a low rate of interest. The long term savings account is not linked in any way with the general loans described next.
Loans: Clients are not required nor encouraged to borrow, and there is no minimum loan value. All borrowers start with a credit limit of 5,000 taka ($60). One loan at a time may be taken per household. Maximum loan interest is 3% per month on the declining balance (36% per year in nominal terms, or about 30% in real (inflation adjusted) terms): but for the entry-level loan (of 5,000 taka) and for all loans as soon as their outstanding balance falls to 5,000 taka or below, only 2.5% per month is charged. A minimum passbook savings balance equal to 1/3 of the loan balance is required as collateral at all times. No other security is required, nor does SafeSave require personal guarantors.
Loans are taken and repaid flexibly, with no minimum nor maximum term duration. Client must pay the month's interest due each month, but principal repayment is left entirely flexible, to give clients the maximum discretion in their use of loans. However, steady repayment progress is required to earn increases to the credit limit, and this provides an indirect incentive (along with avoiding future interest) to repay as quickly as possible.
At any one time, just over half of our clients hold a loan.