"A village savings scheme typically involves a small group (perhaps 15-30 people) who pool their savings. Each buys a share in a fund from which they can all borrow. All must also contribute a small sum to a social fund, which acts as micro-insurance. If a member suffers a sudden misfortune, she will receive a payout."The small group has special rules about how often the group will meet, what interest rates it will charge (typically 5-10 percent a month on loans that have to be repaid within three months) and what loans may be used for. 5-10 percent a month may seem high, but remember that they are paying to themselves.
Faustina Kwei in Ghana is currently using this new model and it has helped her to feed her two children and send them to school. She is using a combination of savings, dividends, and loans.
Source: The Economist