What Is Financial Action Learning For Sustainability?
‘Financial Action Learning for Sustainability’ (FALS)
promotes:
an inclusive, empowering and financially sustainable partnership
between
- women and men from all backgrounds, including the ultra-poor and marginalised groups
- Financial Service Providers.
through integrating:
- client financial empowerment through sharing of pictorial financial planning and management methodology
- strengthening of community financial organisations and social networks
- FSP-level product market research and social performance management
FALS is based on work since 2001 with the micro-finance sector and financial service providers to promote financial inclusion and empowerment as a necessary and integral part of ‘Responsible Finance’ protocols.
FALS adapts simple proven pictorial diagram tools from the generic Participatory Action Learning System (PALS) empowerment methodology for:
- Client financial empowerment to enable women, youth and men from all social and economic backgrounds, including the poorest and those without formal education, to effectively identify and plan how they can best use and benefit from financial products.
- Building inclusive local financial networks: FALS Tools enable women and men to share and upscale good financial management and planning practices with other clients and potential clients, ultimately building a sustainable network of community financial advisers.
For Financial Service Providers – Community-based Financial Organisations (CBFOs), Micro-finance Institutions (MFIs) and formal sector service providers:
- Greater sustainability: funding member/client financial management skills and peer-sharing networks becomes an integral part of business expansion to bring in new reliable clients, reducing costs of following up bad debts and product marketing.
- Participatory product design and market research based on use of FALS planning and analysis tools with groups of members/clients from different backgrounds to discuss potential improvements to products that could increase their usefulness to clients and also be profitable for FSPs.
The basis for this inclusive, empowering and financially sustainable partnership is the development and implementation of:
- Responsible Finance Memorandum of Understanding (RFMOU) between clients and FSPs, developed by all members/clients and integrated into application processes for loans and other services. This is the core FALS tool in the form of a pictorial Financial Management Calendar based on mutually agreed Member/Client Protection Principles and the understanding that sustainable client empowerment also requires sustainability of the FSP (whether commercial or member-owned) to continue to develop and deliver quality products and services.
All these member/client-led inputs form the basis for a parallel process at all stages of:
- Organisational Visioning, Planning and Capacity Building using the same tools within organisations and integrated into staff training enable clearer organisational understanding of responsible finance strategies based on the realities of clients, including women and youth. This leads to better decision-making and communication at all levels.
FALS Evolution and Resources
FALS originated in use of PALS tools as part of participatory gender mainstreaming with MFIs in India (sponsored by ANANDI and CERMI), Bangladesh (CAFOD), Nepal (PACT) and Pakistan (Aga Khan Foundation) 2000-2006, followed by work with MFIs in the Latin America Micro-finance Networks in Central (Nicaragua, Guatemala, Honduras and Costa Rica) and South America (Peru, Ecuador, Colombia, Bolivia) for SNV, Hivos and Oxfam Novib and Sudan with LEAP-PASED. It also build on work in Uganda with the Microfinance Associations of Kabarole Research Centre, Trickle-Up US and savings and credit members of Bukonzo Joint Cooperative Union.
Under Oxfam Novib’s WEMAN programme in 2007 a preliminary draft concept note was developed for FALS as a Financial Action Learning System, and further developed for IFAD’s Rural Finance Programme (RUFIN) in Nigeria.
For discussions and materials on women’s empowerment and gender mainstreaming in microfinance see:
Mayoux, L. C. and M. Hartl (2009). Gender and rural microfinance: Reaching and empowering women: Guide for Practitioners. Rome, IFAD.
Mayoux, L C (2011) Women are Useful to Microfinance: How Can We Make Microfinance More Useful to Women? Presentation to Micro-Credit Summit Campaign Conference
Gender Justice Protocol for Microfinance, signed by participants at MicroCredit Summit, Bali 2011
Financial Action Learning System
FALS was fully piloted for MFIs in Philippines with Oikocredit, NWTF and ASKI and funded by Church of Sweden. It started to be developed for use in VSLAs in Nigeria as a follow-on from GALS under the IFAD/Oxfam/Hivos Empower@Scale project in 2022.
FALS@Scale
Financial Action Learning for Sustainability at Scale (FALS@Scale) is:
A participatory visual methodology for financial inclusion and empowerment of women and men, including the ultra-poor, to:
- enable women and men from all backgrounds, particularly those from marginalised and financially disadvantaged households, to better access, manage and benefit from financial resources as the basis for
- sustainable and empowering community-based financial organisations (CBFOs) and
- an accessible and socially responsible formal financial sector.
FALS@Scale is intended primarily as an entry point inclusive pictorial financial planning methodology to establish visual communication and participatory leadership skills and upscaling systems for more advanced inclusive livelihood development processes.
Why FALS@Scale?
Although establishment of CBFOs has increased access to savings and credit for very large numbers of previously financially excluded populations, studies (including FARMSE reports) have often shown that:
- even where women are the majority of the membership, leadership is often by men or by better-off women. This affects the degree to which women benefit from decisions made by CBFOs.
- women provide the majority of the savings – sometimes foregoing food – but receive the minority of loans
- the contribution to increasing incomes is often marginal – even where loans are invested in production, women’s incomes are generally used for the household while men then keep more of the money that they previously contributed for themselves
- although CBFOs may strengthen social networks, they may also disrupt networks when problems arrive. They also often exclude the poorest and most disadvantaged.
- linkages between CBFOs and the formal financial sector remain weak, particularly for women and more disadvantaged clients.
At the same time many contexts where development agencies are trying to implement inclusive and empowering financial service projects face challenges that require a more simplified entry point:
- low levels of literacy and/or multiple local languages require a pictorial approach where visual communication skills need to be developed at all levels.
- large distances between communities making frequent face-to-face meetings costly in time and energy as well as budget making on-line delivery through the expanding mobile phone networks a better option for part (not all) of the capacity-building.
- difficulties attracting men to join ‘women’s empowerment’ processes, thereby seriously limiting what women as well as men can do to promote gender justice and hence also effectiveness of livelihood interventions.
What is FALSatScale?
In September 2022 an entry-level methodology FALS@Scale was adapted and piloted by IFAD in Malawi as an entry-point empowerment methodology for members of CFOs and VSLAs in partnership with FARMSE and Opportunity Trust as part of thee UN Joint Programme for Gender Transformative Approaches (JP GTA), funded by the European Union.
FALS@Scale has been streamlined and simplified for use by CFOs working in particularly disadvantaged contexts and communities with high levels of illiteracy. It is based on a set of principles, tools, facilitation techniques and stages to:
- Empower women as well as men of all ages and backgrounds to access and manage informal and formal financial services in ways that empower them to achieve a better and happier life.
- Inspire men as well as women to identify and address gender inequalities constraining individuals, households and communities from achieving their visions and full potential.
- Be accessible and inclusive for the most disadvantaged – those who have not had access to any or little formal education, from very low-income backgrounds and marginalised ethnicities.
- Establish transferable visual communication, participatory and leadership skills for ALL participants that they can use in subsequent development interventions to increase inclusion and empowerment.
- Be self-upscaling and sustainable within families and communities through establishing voluntary pyramid peer sharing and support networks.
- Establish networks of community-based champion practitioners who can be supported to become certified paid expert trainers to replicate the process in CBFOs in other areas.
- Mainstream gender equality, women’s empowerment and other sustainable development concerns into the financial services of any specific project, including raising awareness across the commercial sector.
FALS@Scale is an 18 month process from initial design and sustainability planning to final assessment.
It is based on a core catalyst training curriculum of 10×2 hour sessions integrated into CBFO meetings. The training uses just one PALS diagram template: the Vision (Change) Journey, practising the same steps in three cumulative variants. Through integrating distinctive and innovative facilitation techniques that progressively develop confidence, skills and active participation of all participants to inspire changes at household and community levels.
By the end of 3 months each and every participant should have drawn for themselves:
- Happy Life Vision Dream: a life vision that includes not only dreams of nice houses and new businesses, but an awareness of the wider social context necessary for their achievements in terms of equality and fairness in family relationships and their community including environmental sustainability. And a commitment to taking action to promoting these aims.
- Happy Life 5 Year Vision Journey: a 5 year Happy Family Vision Journey plan to work towards the different elements of this vision, including more equal family relationships and community development.
- Financial Action Plan for 1 year: A 1 year financial SMART action plan for economic projects to which their membership in VSLAs will contribute as part of their progress towards their Vision Journey first circle. This is a workable financial plan for savings and credit from their group that members track and update over time. People with little or no formal education can use a pictorial number system that other participants learn to read, even if they use the standard numbers themselves.
Participants track their progress on these same drawings, and share experiences within other CBFO members as part of the monitoring and documentation process. The drawings provide a very rich basis for external qualitative assessments and the starting point for any impact research.
Through a combination of voluntary peer sharing in households and communities and supported CBFO to CBFO replication the methodology can be expected to reach many thousands of direct and indirect participants, depending on the size and structure of the implementing organisations.
!! Insert final downloadable pdf of FALS@Scale Toolkit
Implementation process
Who is involved?
- FALS@Scale champions – members of CBFOs who learn and use the methodology and who will be the main facilitators for peer sharing and upscaling and the rationale for the whole process.
- Community FALS@Scale ambassadors – other people locally eg FSAs, leaders, and hopefully over time some officials, bank staff etc who know enough about the methodology and are convinced of its usefulness enough to advocate and facilitate linkages with relevant decision-makers to avoid the sorts of expense and wastage of time and resources on hospitality that we discussed at the last meeting.
- FALS@Scale facilitation team – field staff in the implementing organisation who are facilitating the catalyst process with people in the community – champions and ambassadors. They support the champions in upscaling to new areas and respond to needs arising, deepening local linkages with other actors and banks. They also coordinate documentation as the basis for planning the sustainability of the financial empowerment process, and communication with other stakeholders.
- FALS@Scale process support team – the team that ensures smooth functioning of the process design and logistics for the work by field staff with CBFO champions, and provides the necessary training resources for the Catalyst process. Depending on extent of in-country or intra-organisational experience with PALS-based methodologies, this may or may not require initial or ongoing support from an international PALS expert.
FALSatScale Financial Empowerment Deepening and Movement-building
FALS@Scale can be used as an inclusive, effective and low cost:
- methodology for financial empowerment and financial inclusion focusing particularly on the ultra poor and marginalised people and communities that can precede, follow or be integrated into CBFO mobilisation to promote inclusion, commitment and more equality and transparency between members..
- stand-alone gender-transformative approach (GTA) through mainstreaming gender analysis and change strategies in both the tools and facilitation methodologies used.
- entry point GTA to more advanced variants of the sister methodology GALS, establishing basic visual communication and participatory skills and bringing many more men as well as women into networks for change through leveraging the networks provided through CBFOs.
- entry point methodology to make more advanced financial planning, livelihood strengthening and business development projects trainings more accessible and inclusive to currently marginalised groups.
- a convincing starting point for establishing linkages between financial empowerment of CBFO members, including the ultra poor, and the other informal and formal sector financial institutions.
Ideally over time FALS@Scale would be followed by or incorporate more advanced features of:
- Gender transformative and leadership development tools (GALS and iLEAD)
- Financial Action Learning System (FALS) financial planning and management tools for financial service providers with Oikocredit partners NWTF and ASKI in Philippines.
- PALS livelihood strengthening and value chain development tools