A very valuable work in a core survival area. A few of the inferences (out of formal study of situations) such as lack of understanding about importance and reasons behind financial volatility of the poor, poverty has touched even the middle income groups, even wealthy countries need to cope up with poverty affirm experience based conclusions. The undeniable and unwelcome truth of unreliability of formal services is good to recognize at least in this platform. But, final requirement of transparency and reliability may generally be counter-productive to the service deliverers. Not any innovation, but truly great innovation is required involving many strong players over stages and durations. Turnaround won’t happen in a short foreseeable future that we see.
Thanks for the positive efforts and the expressions.
Jonathan, Very nicely summarized. My focus of late has been to interview focus groups of immigrants about their informal savings circles - tandas, tontines, sans where ten or so put contribute a set amount weekly with each in turn receiving all the money collected that week. In Delaware the typical group of 12 saved $100 per week with a payout of $1,200 every three months. Disciplined savings along with mutual support works for them. A Nepali student of mine found that every Nepali business was funded through a dikuti - the Nepali term for this kind of group. I have made a point to ask the women cleaning rooms in hotels where I was staying and in every case the immigrant working these jobs were saving $40 or more every week. These payouts provide a reserve cushion against income volatility so the rent can be paid ahead, the car can be fixed, a sick child can go to a hospital. I am now launching Saving Works that convents these revolving groups into what are essentially mini-banks with the members savings what they can every week (but always the minimum agreed on amount) and borrow at low interest from the group fund. The fund is divided among members according to what each has saved plus a share of the interest. The group fund is deposited at a credit union where loan payments are reported to credit bureaus to build the credit score of even undocumented membres. Saving Works will serve as a bridge between savings circles and financial institutions. The first two chapters of my book on Savings Groups “In Their Own Hands: How Savings Groups are Revolutionizing Development” can be found at http://www.intheirownhands.com
COMMENTS
BY Atanu Chaudhuri
ON February 18, 2016 11:57 AM
A very valuable work in a core survival area. A few of the inferences (out of formal study of situations) such as lack of understanding about importance and reasons behind financial volatility of the poor, poverty has touched even the middle income groups, even wealthy countries need to cope up with poverty affirm experience based conclusions. The undeniable and unwelcome truth of unreliability of formal services is good to recognize at least in this platform. But, final requirement of transparency and reliability may generally be counter-productive to the service deliverers. Not any innovation, but truly great innovation is required involving many strong players over stages and durations. Turnaround won’t happen in a short foreseeable future that we see.
Thanks for the positive efforts and the expressions.
BY Bernadette Wright
ON February 18, 2016 01:13 PM
Yes, while each situation may be unique, it is always valuable to look at what can be learned from others who have worked on the same topic!
BY Jeffrey Ashe
ON February 19, 2016 11:24 AM
Jonathan, Very nicely summarized. My focus of late has been to interview focus groups of immigrants about their informal savings circles - tandas, tontines, sans where ten or so put contribute a set amount weekly with each in turn receiving all the money collected that week. In Delaware the typical group of 12 saved $100 per week with a payout of $1,200 every three months. Disciplined savings along with mutual support works for them. A Nepali student of mine found that every Nepali business was funded through a dikuti - the Nepali term for this kind of group. I have made a point to ask the women cleaning rooms in hotels where I was staying and in every case the immigrant working these jobs were saving $40 or more every week. These payouts provide a reserve cushion against income volatility so the rent can be paid ahead, the car can be fixed, a sick child can go to a hospital. I am now launching Saving Works that convents these revolving groups into what are essentially mini-banks with the members savings what they can every week (but always the minimum agreed on amount) and borrow at low interest from the group fund. The fund is divided among members according to what each has saved plus a share of the interest. The group fund is deposited at a credit union where loan payments are reported to credit bureaus to build the credit score of even undocumented membres. Saving Works will serve as a bridge between savings circles and financial institutions. The first two chapters of my book on Savings Groups “In Their Own Hands: How Savings Groups are Revolutionizing Development” can be found at http://www.intheirownhands.com
BY Conrad K
ON July 12, 2016 11:39 AM
Another Good read: ERADICATING POVERTY IN AFRICA: CASE FOR KENYA http://development.watsupafrica.com/news/eradicating-poverty-in-africa-case-for-kenya/