In an article published in The Economist titled, Microfinance focuses on lending. Now the industry is turning to deposits, Sarita Gupta, VP for Global Resources and Communications responds:
The Gates Foundation is indeed going to be a game changer for the microfinance industry, not only because of the focus on savings but also because the Foundation is encouraging experimentation and innovation by its grantees to figure out what will work to make it easier for the world’s poor to save.
Women’s World Banking, another of the Gates grantees as part of the Foundation’s savings initiative, believes that changing attitudes about savings and increasing financial literacy among clients is just as important as the development of the savings products themselves.
We have found that while most poor households in Latin America and the Caribbean save for emergencies, decisions about how much to spend and how much to save are hotly contested issues. Among other things, Women’s World Banking is using a portion of its grant to create a “social soap opera” to educate the public about the importance of savings, and alter cultural attitudes and behaviors related to money.
To ensure widespread adoption of savings in microfinance, we need both clients to demand the service and an industry prepared to deliver low-cost, convenient savings services with products that make sense for the unique needs of the poor.