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The aim of the Individual Development Accounts (IDA) Program – Let´s Fulfil Our Dream, realized from 2007 to 2014, was to offer poor families and individuals an opportunity to take an active role in improving their own financial situation.
The long-term objective of the Project was to convince Slovak lawmakers that paying out social benefits unconditionally increases the dependence of the poor on the State and eliminates their courage and motivation to provide for their day-to-day existence themselves.
Another Project aim was to convince Slovak lawmakers about the necessity to develop new social policy tools that would help the jobseekers registered at the labor offices gain financial independence and improve the quality of their lives.
The main principles and the process of the Savings Program are described in the diagram below (click to enlarge):
The Savings Program was implemented in 9 towns and 29 villages (38 localities altogether) of Prešov, Košice and Banská Bystrica Region.
During the eight years of its implementation, 926 clients entered the Program and 626 clients finished it successfully.
The greatest contribution of the Savings Program has been the fact that the participants were actively involved and managed to acquire possessions by their own efforts.
The quality of the lives of the clients who joined the Savings Program improved in the following ways:
- Nearly 90% of successful clients improved the quality of their housing.
- Families participating in the program placed more focus on the education of their children and created better conditions for education in the home environment.
- hygiene improved in the households participating in the Savings Program, mainly due to the fact that over 20 % of clients were saving to build or repair their plumbing, bathrooms, kitchens, shower baths, etc.
- House repairs and reconstruction were realized by clients themselves under the professional guidance of a construction coordinator, an ETP employee, so the clients could gain working skills.
- The children and young people from the successful families participate more often in the education, social, cultural and sports activities organized in the community centres and their parents care more about their children finishing their high school or university education.
- The ability of individuals to remain in the Savings Program has also increased their respect within the local communities. Some of the children whose parents participated in the first phase of the IDA1 Savings Program entered the IDA2 Program themselves. However, their aims were different from those of their parents: the parents had been saving to improve the quality of their housing, while the young people over 18 entered the Program to attain education.
- The participation of clients in the financial education improved their financial literacy, as well as their overall ability to plan their lives and set their long-term priorities.
- Distraints were also less prevalent among the clients who participated in the Program.
- After the end of the Savings Program, some clients decided not to cancel their passbook accounts and now continue saving.
- The clients of the Savings Program who later entered the Microloans Program are also disciplined in repaying their monthly microloan instalments.
The experience gained in the Savings Program confirms that providing financial education and improving the access to basic financial services, such as savings and microloans, has a positive impact on the lives of the poor inhabitants of the socially excluded communities.
For more information on the Savings Program and its results you can download our publication The IDA Savings Program – Let´s Fulfil Our Dream, available in Slovak and English.