Thursday, December 02, 2010

Melinda Gates on Saving for the Poor

In a recent Gates Foundation Blog, Melinda Gates discussed the importance of saving for poor people. With the recent surge in the distribution of microloans to people in developing countries, more people in the development field are realizing that saving mechanisms are just as important. Poor people have been saving for a while, (it’s hardly a new concept to them), but it has been hard for them to put their savings in banks as they are geared towards wealthier customers, and are often hours away in a city. As a result, poor people’s options for saving are limited to hiding cash in their homes, and buying jewelry or livestock. These people need reliable, safe ways to save their money so that they can invest in their futures and their children’s futures. Just like any person in the U.S. would want.

The Global Savings Forum was held on November 16th in order to find solutions that provide impoverished communities with money-saving mechanisms. Key players from banks, microfinance institutions and more, gathered to brainstorm about what innovations could make “financial inclusion a reality for poor people.” Melinda Gates, a participant at this Forum, pledged $40 million from the Gates Foundation to help these partners collaborate. She remarks that her inspiration to get involved in this project was drawn from a trip to Mexico, during which she witnessed a system involving women receiving welfare payments at rural retail stores. It’s a system that works because the women trust the system and they have better access to their savings accounts. Additionally, the women are given a smart card that is linked to their finger print in order to access their accounts.

-Clare Ortblad

SOURCE: Gates Foundation