Savings as a Financial Intervention: USAID online conference July 8 - 10

This week USAID's knowledge sharing website, Microlinks.org and MicroSave are hosting a three-day interactive, web-based discussion on "Savings: the Forgotten Half of Financial Interventions." This discussion is open to the public and a worthwhile seminar for anyone in the global savings and asset development community (see a summary of topics and facilitators below). To begin my participation in this discussion, I would like to contribute not by posing a question to the hosts, but by sharing with them a simple observation: As someone working on asset building and financial inclusion for the poor (and/or their cross-fertilization in the development field), I would contend that the hosts got it wrong when chose the title for this event. Indeed, "savings" is not "forgotten" at all. Though perhaps traditionally underemphasized, I would argue that, on the contrary, savings is the in fact the "next big thing" in financial interventions.

Savings has been re-emerging as a major theme in microfinance for some time now, and was the main theme of a major symposium the Global Assets Project hosted over a year ago in Singapore. Nevertheless, I agree that we still have much to learn and do in the field of savings for the poor and lower income populations around the world, and look forward to learning from the facilitated dialogue and global experience-sharing this seminar makes possible.

Here's more information on the speaker's corner (from the microlinks website):

Introduction to this discussion:

The rapid growth of the microfinance sector in the past couple of decades signifies its success in terms of outreach and sustainability. Although the sector continues to be primarily supply-driven, changes are underway and service providers have started to acknowledge that the low income are not a homogenous group, but a group that, like any other group, requires a wide range of financial services and has evolving demands.

While the demand for services is changing, on the supply side most of the financial interventions have been credit-led. Savings remains neglected and is probably talked about only when policy or regulatory issues are discussed. This is unfortunate as researchers globally have revealed repeatedly that the low income not only have the capacity to save, but that they save significant amounts (in cash or kind), and also that they lose a lot of these savings either to fraudulent institutions or by theft or natural disasters. In addition, the use of informal savings mechanism is high among low income people.

Further complicating this unbalance between the demand for savings options and service offerings from the supply side is the access to secured services in remote areas, difficult terrains or areas vulnerable to some risk, for example, flood prone areas. Absence of formal savings services results in "financial exclusion" of the larger population.

Join the dialogue:

Hosted by Madhurantika Moulick of MicroSave, this Speaker's Corner aims to bring into focus the various issues related to savings - the forgotten half of the financial interventions - by looking at the demand and supply side of savings, and bringing special attention to savings options in hard to reach areas.

Each day, participants are invited to share their own experiences, questions and comments in the discussion forum:

• Day 1 (July 8) - Demand for Savings Needs of Low Income People. What are the needs? Are those needs diverse or homogeneous? Can affordable products be designed that can meet client needs?
  Guest facilitator: Lisa Parrott and Sukhwinder Arora.
• Day 2 (July 9) - The Suppliers's Perspective on Savings. Why are savings not promoted? Is it due to legal restrictions only, or are other factors in play? What challenges are service providers facing and what opportunities or solutions exist?
  Guest facilitators: N. Srinivasan, Renée Chao-Béroff, and Mary Miller.
• Day 3 (July 10) - Savings Options in Difficult Areas. What exactly are the challenges in reaching out to rural and remote areas with effective savings services? How have others overcome these challenges, and is technology the answer?
  Guest facilitators: Hans Dieter Seibel, Hugh Allen, and Kimberley Wilson.