A loans and savings initiative is transforming the lives of some of the poorest in 11 countries

On a table in the middle of the room sits a green metal box with three padlocks, to which three people each have a key. Everyone present chips in an agreed amount of money and gets their passbook stamped – though if you’re financially stretched that week, you can put in a little less. The money all goes into the box.

There is also an opportunity to borrow some cash at a reasonable rate of interest. However, if it is an emergency – for example, your son is ill and needs to get to hospital – there may well be a whip-round. Meanwhile, an announcement that someone is able to pay back what they owe is met with clapping and cheering.

Welcome to a typical village savings and loans association (VSLA) meeting in remote Kawete in Uganda, as witnessed by Alastair Stewart, the ITV newsreader, who is an ambassador for poverty charity, Care International UK.

Stewart was in Uganda to help raise awareness of a project called Banking on Change, run by Care International and fellow charity Plan UK, that aims to provide basic financial services to some of the poorest people in 11 countries. During his trip the veteran newsman met some of those helping villagers to manage their money more effectively, as well as several individuals who have defied the odds to set up their own small businesses. However, he says: “For me, the key thing was sitting in on two savings and loans association meetings.”

Stewart was impressed by what he saw. He was particularly struck by the way the association members – the majority of whom tend to be women – would rally round and offer financial help if their neighbour was in trouble.

At the end of each meeting, one of the members is entrusted with the job of travelling to the town a few miles away and paying the money in to the association’s bank account. However, a little cash is left in the box under lock and key, so that there is something in the kitty next week if someone needs some emergency funds.

This, Stewart told Guardian Money, is real back-to-basics retail banking that has “nothing to do with Libor, capital markets or investment banking”.

The reference to Libor is intriguing because the third member of the Banking on Change project partnership, along with the two charities, is Barclays, which invested £10m in the programme three years ago. The programme ran as planned in the 11 countries until October 2012, and Barclays has committed to extend the partnership for three more years, with discussions currently taking place as to what shape it will take in future.

The bank’s reputation took a severe battering because of the Libor rate-fixing scandal, and it was on the front pages again this week over allegations that it attempted to manipulate the US electricity market. But thousands of miles from the City of London Barclays is funding a programme that is helping to transform the fortunes of the financially excluded in the developing world and, arguably, doing what many people think the big banks should be doing: getting back to their core activities of collecting deposits and making loans.

Up and running since 2009, Banking on Change operates in Egypt, Ghana, India, Indonesia, Kenya, Mozambique, Peru, Tanzania, Uganda, Vietnam and Zambia, and focuses on “savings-led microfinance”, in particular, helping to set up savings groups such as village savings and loans associations in poor communities. The programme aimed to reach around 400,000 people but has exceeded that target; so far, it has provided basic financial services to 490,000 people and facilitated the creation of more than 21,000 groups.

The charities say that saving regularly via local groups enables members to manage their limited funds better, making them more resilient to financial emergencies and giving some the opportunity to invest in small-scale enterprises. Those groups that operate successfully are able to access formal banking services, enabling them to be self-sufficient.

Some will be cynical about Barclays’ reasons for getting involved, and may wonder whether the real agenda is creating a new group of financially naive customers for its products.

Stewart, who met with a Barclays branch manager in a town called Iganga, as well as the head of the bank’s Ugandan division, says there are clearly business benefits for the bank, but adds: “I was quite surprised on this trip about how little Barclays did to promote their brand and their product range. The principal point of contact for the customers is the two charities in the field, and then there is a guide/mentor/adviser, predominantly from something like the local farming collective, or co-operative.

“The interface with the bank comes a bit later in the process. It has enabled this programme with its financial clout but the real leverage is vested in the two charities and the independent mentors.”

Besides which, he adds, “we couldn’t do it all ourselves – we need the assistance and skill sets we get from local Barclays people”.

While in Uganda, Stewart met association members who have now moved on to setting up their own businesses. Sarah Mutanda told Care International that she originally used to think banks “are not for people like me. They are for rich people and people with big businesses”. Now she is treasurer of her local village savings and loans association, and says she has become financially more stable as a result of the Banking on Change programme – and has also seen an improvement in her community.

Mutanda says the women in her association are no longer solely dependent on the men. “Even when there is family breakdown, for example divorce, women can support their families alone. Now it is very rare to see a child who doesn’t go to school if their father or mother is in the VSLA. The group has empowered us, especially the ladies, to do business. Saving has forced them to be enterprising and do business, to generate money to save at each meeting.”

For her part, Mutanda bought a motorbike, which she rents out to a local driver who uses it as a taxi, and now plans to buy a fridge after spotting an opportunity to sell cold drinks.

Stewart also met Hassan Kabi, who has a personal bank account as well as being part of his village’s association. Prior to the Banking on Change programme, he never really had savings. However, in 2010 he joined the association.

“He saved a bit, he borrowed a bit, and now he runs a mobile phone shop,” says Stewart. Back in 2010, Kabi’s family were living in a small hut of mud with a grass roof. Since then, as a result of his increased income, he has been able to build a bigger permanent house, and he says his family enjoy an improved standard of living.

“Hassan and Sarah are transformational,” says Stewart. “They have become fundamentally different people with their feet still firmly rooted in their communities. They personified everything we were trying to achieve.”