More on savings pools
How are savings pools administered?
Every pool is independent and self-governing and makes its own decisions on all matters, including loan procedures.
Living Economies shares information on typical procedures that have been adopted by well-functioning pools around New Zealand. Here are some common approaches:
- pools operate transparently and all decisions are made jointly by the pool members, with everyone having an equal say in loan agreements and other pool decisions
- pools require written confidentiality agreements from all members at the time they join the pool
- pools, in exceptional circumstances, might give a dissenting member the option of opting out of a particular loan, so that the dissenting member neither blocks a loan going forward nor participates in its risks
- pools require a mutually agreed form of security against loans, especially larger loans
- pools might purchase an item on behalf of a member, and own the item until the loan has been repaid in full
- pools require written (legally-enforceable) loan agreements
- a pool volunteer keeps the above records without payment
- pools open bank accounts in the name of a few volunteers from the pool, with all pool members able to make deposits and at least two signatories required to make a withdrawal
- pools keep any bank interest (if any) to defray any operating costs of the pool, rather than distributing it to any member as income
- a pool volunteer (or rotating team of volunteers) provides all members with monthly statements of each members savings, loan, and reciprocity points balances
- pools measure reciprocity commitments with a simple points system, with point credits given on a monthly basis whenever members have a positive balance (savings) and points debited each month when members have a negative balance (loans)
- pool members can withdraw their own savings at any time simply by notifying other pool members, provided that (1) the money is currently available instead of tied up in loans, and (2) the member does not have any outstanding reciprocity agreements
- pools usually do their own accounting and administration, perhaps in a simple spreadsheet, and software is also available
Savings pools function best when members come together with an explicit intention to support one another, so that everyone works together to get every member's needs met.