Constitution of the [name] Savings Group

[This is a template for a Savings Group constitution. You can use it as is, or you can modify it as
you wish. In any case, you will need to fill in the sections in blue.]

By this constitution, we, the founding members of the [name] Savings Group, establish the rules
and principles that create our group, and keep it running well. We create this group on [date]. We
all agree to respect this constitution unless and until we modify it according to the rules and
procedures laid out below.

Membership
The founding members of the group are:

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

[Full name] [Full name]

Members may leave the group at any time. Conditions under which they leave are described
below. New members may join the group normally at the end of a cycle, or exceptionally during a
cycle under conditions that will be defined by the group. Accepting a new member requires the
unanimous vote of the members present at a voting meeting. The names of new members will be
added to this document at the time they join the group.
New members of the group are:

[Full name] [Date joined]

[Full name] [Date joined]

[Full name] [Date joined]

[Full name] [Date joined]

[Full name] [Date joined]

[Full name] [Date joined]

[Full name] [Date joined]

[Full name] [Date joined]

[State any limitations on membership, such as residence, occupation, gender, or age. If no

limitations, then put nothing here.]

Meetings
The group will meet [period such as “weekly”, “every other week”, “monthly”] on the [specify
meeting time, such as, “every Tuesday”, “second and fourth Monday”, “fifteenth of the month”]
at [specify time]. The meeting location will be [specify, such as “123 Main St.”, “St. Joseph’s
Church Hall”, or “the homes of members on a rotating basis”].

Purpose
The purpose of the group is to [purpose].

Officers
The group will have the following officers:

A Chairperson, whose role is:

 Have the meeting begin on time and run efficiently.

 Assure that the other officers carry out their roles effectively.
 Levy fines impartially and regularly for members according to this constitution.
 Represent the group to the outside community as necessary

Constitution of [name of group] page 2

  Assure that the group and the members respect this constitution.

A Secretary, whose role is:

 Maintain written financial records that are accurate and complete, and allow each
member to understand their own savings and loans, and the total financial position of the
group.
 Train at least one other group member to be able to keep the records during the
Secretary’s absence, and to replace the Secretary when appropriate.
 Substitute for the Chairperson in case of the Chairperson’s absence
 Maintain whatever minutes and records of meetings the group may judge necessary,
including written records of any decisions, such as elections, taken by the group.

A Treasurer, whose role is:

 Maintain the group’s financial records and cash in security.

 Assure that procedures are followed for the security of assets and the confidentiality of
records between meetings.

A Money Counter, whose role is:

 Count the money transparently and in front of the group for all disbursements, loans,
repayments, or savings, during meetings.

Key Keeper(s)

 Keep the key(s) to the group’s lockbox and assure that no one opens the box between
meetings.
 Attend all meetings punctually, knowing that the meeting will not take place without the
Key Keeper.

[Other officers, such as “Social Officer”, “Vice Chairperson”].

Elections
Elections will be held at the beginning of every cycle. [Optional: There must be at least two
candidates for every post. Nominations may come from the floor, and members may nominate
themselves]. [Optional: A member may occupy a post for a maximum of [number] consecutive
cycles.] Elections will be conducted by secret ballot.

Any member can call for a vote of no confidence in a member of the Management Committee. A
vote will be held if a quorum of members is present. If the vote is passed by a majority of the
voting members, the member must step down from the Management Committee and another
member will be elected to fill the position.

Quorum: A quorum of members will be necessary for any decision to be taken, including

Constitution of [name of group] page 3

elections. A quorum is defined as at least [Specify: recommended: two thirds of the members].

Attendance
Members are expected to attend every meeting. However, if a member has a reason such as
illness, work or travel that makes it impossible to attend, the member should communicate that
reason in advance to the Chairperson who may excuse the member.

A member with [Specify number] unexcused absences may be asked to leave the group, on
majority vote of the members.

Saving
Each member agrees to save a minimum of [Specify amount] at each meeting, and a maximum of
[Specify amount – recommended ten times the minimum]. Members who cannot attend a meeting
should send in their savings with another member. To facilitate bookkeeping, members should
save an exact multiple of the minimum savings amount.

If a member fails to save, they shall make it up without penalty at the next meeting. If the
member fails to save two consecutive meetings, they must make up both minimum amounts plus
a penalty, specified below.

The Secretary will inform any member of the exact amount saved to date by the member, on
request, during a meeting.

Loans
Once the group’s total savings have achieved an adequate amount, members may request to
borrow from the group. The Chairperson after consultation with the members shall determine
when it is time to start borrowing. Members can borrow up to three times the amount they have
saved during the cycle, and the Record Keeper will verify that each loan request conforms to that
principle. A member can only have one loan at a time.

The maximum length of loans is [Specify period. Recommended: three months]

The rate of interest to be charged every month until the loan is repaid in full is: [Specify rate.
Recommended: 2-5% per month.]

When a member does not repay a loan on time the member will not be eligible to take out another
loan until three months after the loan in arrears has been repaid. Until the loan is repaid, the
member will still be required to save, contribute to the Social Fund, and pay interest every month
until the loan is repaid.

When a member does not repay a loan by the end of the cycle the outstanding loan plus any
unpaid interest will be deducted from the member’s savings prior to share-out.

Leaving the group

Constitution of [name of group] page 4

If a member leaves the group during a cycle for a compelling reason (for example, health reasons
or moving away) the Record Keeper will calculate how much they must be paid using the
following principle: They will receive their total savings minus any outstanding loans including
interest and outstanding fines. The group may decide that they can take their money at the time
they leave the group, or will require that the member wait until share-out. If they receive a
payment during the cycle, they will not receive any additional interest payment. If they leave their
money in the group until the end of the cycle, then they willl share in end of cycle payout as all
other members. Their share will be sent to the member’s forwarding address at the end of the
cycle.

With the group’s permission, a member who moves away may be allowed to continue as a long-
distance member of the group until the end of they cycle. In that case, they will make payments
electronically, and will be expected to observe all group rules except those having to do with
attendance.

If a member leaves the group before the end of the cycle for no other than their preference to
leave, the Record Keeper will calculate how much they must be paid using the following
principle: they will receive their total savings minus any outstanding loans and minus any
applicable interest and outstanding fees. They will not participate in the share-out.

A member may be expelled from the group by a two-thirds majority of members present for
extraordinary circumstances such as insulting another member, inappropriate sharing of
information about the group, or behavior which discredits the group. In that case, the Record
Keeper will calculate how much they must be paid using the following principle They shall
receive their total savings minus any outstanding loans including interest and any unpaid fines.
The expelled member will not be eligible to participate in the share-out.

If a member dies the Record Keeper will calculate how much money should be given to their
heirs, using the following principle: At the time of share-out, the designated beneficiary will
receive what the member would have received based on their total savings, and outstanding loans
and fines.

Social Fund [Recommended but optional]

The group will maintain a Social Fund. Members will each contribute [Specify amount.
Recommended: half or less of the minimum savings amount for a group that meets weekly] at
every meeting. This fund will be kept separately from all other funds, and will not be used for
lending, nor for administrative expenses. It will not be shared-out, but instead will carry over into
the following cycle.

The Social Fund will be used for the following purposes: [Social Fund usage varies a great deal
from group to group. Some groups only use it to help members, while others only use it in the
community. Others do a mix of internal and external uses. The following are some ideas that you
may choose among.]

Constitution of [name of group] page 5

[The Social Fund will be used when a member of the group has an emergency. This can include:
a death or serious illness in the family; loss of employment; utility cutoff. The amounts to be
given will be consistent with what other members have received, and within the ability of the
Social Fund to finance.]

[The Social Fund will be used by the group to support civic or social causes that are supported by
the majority of group members, and with a vote of two-thirds of the members present. These
might include; helping people who are suffering from a death or illness in their family, or people
who have lost their employment; civic organizations that work in the area where most members
live.]

[The Social Fund will be used for social activities of the group and their families, such as trips or
picnics.]

If a member misses a Social Fund contribution, they shall make it up without penalty at the
following meeting. If the member fails to contribute to the social fund two consecutive meetings
in a row, they must make up the missed contribution, plus a fine as described below.

Fines
The members agree to pay fines for violating the rules of the group. The fines are a way of
apologizing to the group and promising to respect the rules in the future. For that reason, they
should be paid quickly and cheerfully. The fines in this group are:

Policy broken Fine amount

Late to meeting [Specify amount. Recommended: $1]

Missed meeting without informing group [Specify amount. Recommended: $5]

Phone rings during meeting [Specify amount. Recommended: $1]

Late loan repayment [Specify amount. Recommended: $1-5 per

month]

[Other] [Specify amount.]

[Other] [Specify amount.]

Share out
The cycle of the group is [Specify period. Recommended: “about a year” or “decided by the
members at the beginning of every cycle”]. No new loans will be made for about three months
before the end of the cycle, unless decided by the chairperson that a shorter period loan, repaid by
the end of the cycle, is appropriate. By the end of the cycle, all members must have paid back all

Constitution of [name of group] page 6

outstanding loans.

To prepare for share-out, The Record Keeper will prepare a list of each member’s savings, less
any outstanding amount the member owes to the group. This is the base amount that each
member will receive at share out. The Record Keeper will add up the total of each member’s base
amount, and subtract that from the amount of cash assets of the group. The remainder is called the
“Profit”. The Record Keeper will calculate the amount of Profit that each member should receive,
in addition to their base amount, by dividing the Profit in proportion to each member’s total
savings.

The Record Keeper will assure that the group has available proper denominations to pay each
member what is owed.

After each member has received their share-out in cash, the cycle is completed.

Purchases
From time to time, the group may need to purchase supplies and other assets, such as a cashbox
or pens. The chairman with the group’s advice will decide whether to make a special assessment
of the members, or take the money from the loan fund.

Amendments to the Constitution

The constitution may be amended, at the end of the cycle, by majority vote of the members
present at a meeting, provided a quorum is attained; however, if the group wants to amend the
constitution, this intention must be announced no later than the previous meeting, by phone calls
or mail.

Constitution of [name of group] page 7