Safe and accessible : bringing poor savers into the formal financial system

Abstract

Research has repeatedly demonstrated that saving is central to poor people's economic management strategies. Projects such as the financial diaries initiatives in India, Bangladesh, and South Africa; MicroSave in eastern and western Africa; and studies by the International Food Policy Research Institute, for example, have documented savings practices among the poor. What is unclear is how well formal financial institutions satisfy poor savers' needs. Although over 90 percent of adults in industrialized economies typically have accounts in financial institutions, market studies in some areas of the developing world indicate penetration rates as low as 6 percent. Access to savings services for the poor thus varies widely. Understanding this variation and its root causes is the primary goal of the Consultative Group to Assist the Poor (CGAP) country-level savings assessments. The assessments explore opportunities and constraints encountered by formal institutions in meeting demand for deposit services among the poor. This focus note summarizes the findings from country- level savings assessments in Benin, Bosnia, Mexico, the Philippines, and Uganda, which suggest five strategies for improving poor people's access to savings services.