0 Replies Latest reply: Apr 28, 2016 6:16 AM by getaneh RSS

    Do Poor People Save?

    getaneh C4D Enthusiast
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      We recently finalized an assessment of local saving mobilization of microfinance institutions, and how poor clients deal with them, including if the services from these institutions meet poor peoples' demand on .... The findings were really interesting .... Fr the poor, particularly those with low, irregular and unreliable income, saving is critical. Poverty shaped some of their behavior, rendering them often cunning, conservative survivalists, who were forced by circumstances to find myriad ways to deal with crisis, periodic shortages. Research in many countries increasingly demonstrated that the poor really demand saving services, even more than the other category of the population, not in-spite of, but because of their poverty and vulnerability (that they are not sure to even maintain current level of income for survival due to variety of risk they learn in real life, relating to draught, markets, price, etc). Indeed, the poor tend to save fixed amounts of money regardless of income, varying their consumption according to income. In other words, poor people do not save according to the equation Savings = Income – Fixed Consumption but according to the equation, Consumption = Income – Fixed Savings.  Their decision to save is, therefore, not an income-surplus function, but rather a reserve. .....I can share the draft report (Contact -- getanehg2002@yahoo.com)


      Earlier version of the study report is posted at


      http://www.microfinancegateway.org/library/overview-practical-challenges-local-saving-mobilization-ethiopian-microfinance-institutions