PoP Briefing Note 9 - Three Country Analysis

In order to find an answer to a very simple question which has never been satisfactorily answered "Do poor people have financial lives?, the authors of the  "Portfolios of the Poor" tracked the earning, borrowing, spending, and saving practices of 250 households in Bangladesh, India, and South Africa. This Briefing Note takes a closer look at the research sample from all the three countries.

The Brief Note explains the process of recording data and use of this data to create household-level balance sheets and cash flow statements. The Note brings forth the finding regarding the sources of income of poor by categorising their earning activities. The note further explains the saving mechanism of the poor and posts a major finding that microfinance customers often prefer to "borrow to save" because the payment discipline provided by microfinance loans is stronger than savings clubs. The Briefing Note further reveals the borrowing pattern of the poor where it offers an insight that on overall basis majority of loan were borrowed from "informal markets". The Briefing Note also explains in details the major expenses, insurance needs, life cycle events and emergency needs of the poor.

The Briefing Note explains the lessons learnt from the portfolio approach and emphasise the need for improved product design to better meet the needs of poor households.

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