Are the poor able to save money, even a few pennies a day or a week? The answer is yes, and microfinance institutions around the world are helping them do so by operating savings programs in addition to loans.
Grameen Foundation today announced a new initiative designed to expand safe access to formal savings accounts for poor people, especially those living on less than $1.25 per day. The Microsavings Initiative, which is supported by a $9.78 million three-year grant from the Bill & Melinda Gates Foundation, will work with microfinance institutions (MFIs) in Ethiopia, India and the Philippines to test and refine models that can be used by other institutions to provide savings options for people living at the very bottom of the economic ladder. The initiative aims to create 1.45 million new savers at these institutions over the next three years. The Progress out of Poverty Index™ (PPI™) will help in this process.
Two of the three MFIs chosen are already using the PPI to better serve their poorest clients. The Microsavings Initiative plans to use the PPI to measure the impact of savings programs, as well as credit programs, on MFI clients. The PPI will help answer the question, “how do savings programs help move clients out of poverty?”