The global financial crisis has turned us into a world of savers — including the poorest people on the planet.
Elsa Ligua is one of them. As a food stall vendor in the Philippines, paying for her four children to go to college once seemed unimaginable. But Ligua scrapes together 50 cents every day to give to a savings collector who visits her home. The money is deposited in a bank account that pays interest and is insulated from the daily demands of life below the international poverty line. She hopes to have $200 squirreled away by this summer — enough to pay at least some tuition. …
… Microsavings programs include informal savings circles in Africa and mobile-phone deposits in India. The field has attracted $500 million in grants from The Bill and Melinda Gates Foundation. Many institutions that were making microloans are now adding microsavings to their offerings; some have stopped lending money.
Still, the sector is just a sliver of the size of microcredit (a.k.a. microlending). Growth will hinge on making the case for companies to invest in a business model with uncertain returns and high costs. It will need technological advances that allow financial institutions and their customers to access and move money quickly. And it will require building the trust of the poor, penny by penny.
“I think everybody thought this stuff is just gonna take off like wildfire,” said Kim Wilson, who lectures on microfinance at the Fletcher School at Tufts University. “It’s slow. It requires a lot of investment in time.”
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