In 2001 I outlined a proposal to a large charity to deliver savings to Cambodian villagers. The British director was quiet until I finished, when he announced: “there is only one difficulty with this proposal. Villagers don’t have any money – they are too poor to save.”
It’s been a decade since the publication of The Poor and Their Money, Stuart Rutherford’s classic rebuttal of this impoverished — and impoverishing — idea. But in development practice it lingers – as silent and influential as a racial prejudice — in our institutions and our thinking.
If you talk to villagers, don’t ask them if they save.
They will say ‘no’.
They live in a poorly regulated setting circled by many hungry sharks – fraudulent NGO workers, corrupt government officers, private sector con artists.
Instead, ask them: “What expenses did you have to deal with last month?”
They will provide a formidable list — schooling for their children, emergency medical costs, working capital and bicycles, farming equipment, mobile phones and home improvements.
Of course they save to meet these costs. And helping them to meet these costs is one of the most useful things we can do. We don’t need to give cash hand-outs or hire a cast of thousands to help them. We just need to help them secure a safe, flexible place to save. They will do the rest.
Savings mean choice, ability to plan for the future, and above all — freedom.