An article in The Economist weekly magazine titled, “Savings and the Poor: A Better Mattress,” examines the current market for microsavings products and argues for better technology and more flexible regulation. The article states, “Part of the problem with trying to mobilize deposits from poor people is simple economics. It is hard to make a profit from customers who make lots of tiny deposits without massively trimming transaction costs.” It suggests, however, that mobile banking and branchless banking can significantly decrease these costs. For this to happen, the article points out, banking regulations would have to become more flexible regarding who can accept deposits.
By Stefanie Rubin, Research Associate
Additional Resources:
The Economist: “Savings and the Poor: A Better Mattress,” http://www.economist.com/business-finance/displaystory.cfm?story_id=15663834
MICROCAPITAL BRIEF: Bill & Melinda Gates Foundation Awards $38m in Grants to Help Microfinance Institutions Expand Savings Initiatives for Poor: https://www.microcapital.org/microcapital-brief-bill-melinda-gates-foundation-awards-38m-in-grants-to-help-microfinance-institutions-expand-savings-initiatives-for-poor/
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