Over the last few decades, one of the most popular anti-poverty schemes around the world has been microcredit — getting small loans to the poor.
Microfinance, generally referring to a range of services aimed at the poor, is now a huge — sometimes controversial — industry.
But what’s been missing from microfinance is savings.
“The poor don’t have a safe or efficient means for saving,” Melinda Gates said today at a Seattle confab called the Global Savings Forum. Lack of savings keeps the poor at risk of any costly emergency, she says, or simple theft.
Today, the Bill & Melinda Gates Foundation announced it will be investing half a billion dollars over the next five years in “microsavings” — helping the poor find new ways to save what little money they do make.
One increasingly popular method involves using mobile phones as basically a hand-held ATM and banking transfer system. In Kenya, a program known as M-PESA (Swahili for money), allows the poor to use their cell phones to buy, transfer and collect small sums of money. Continue reading