The Conclusion of Hundreds of Experts: Savings Is Not Relevant

The Conclusion of Hundreds of Experts: Savings Is Not Relevant

The Microfinance Gateway has published the outcomes of a virtual conference on “Understanding Multiple Borrowing and Avoiding Over-indebtedness among Clients”, organised by CGAP, MicroSave and the Institution for Financial Management and Research.

The Gateway explains that “while there are no easy answers, several insights did emerge from the nearly 700 comments posted during the conference.”  These insights are summarised in a brief publication posted by the Gateway last week.

The document is succinct – totalling just three pages – and a quick analysis of the word count is highly revealing.  The terms below appear with the following frequency.

Loan (credit, borrowing):  9 times

Payment (pay, repay, repayment):  6 times

Savings:  0 times

Insurance:  0 times

The Gateway requests that you “stay tuned if you want to learn more on the topic and where to find practical tips and resources from the experts.”

And if the conclusions of this conference are disappointing to some readers, it is perhaps our responsibility to participate in and help shape the direction of this conversation…it may be the time for a savings revolution. 


Reader Comments (5)

David -

Thank you for this post. I too wondered why savings was absent from a conversation about debt and indebtedness. But, CGAP did do a publication called Too Much Microcredit? A survey of the Evidence on Over-Indebtedness in Sept. 2011. Savings comes up on page 31.

Reading the report which I found very helpful pointed to a tricky trade-off. The more savings becomes part of the solution, the more one wonders if savings will be whisked away by banks with troubled policies or mobile providers with troubled systems. Savings groups seem like an easy answer and maybe they are a start but they can't be the only answer.


Fri, February 3, 2012 | Kim Wilson

Thanks so much for putting this out there. I agree with you that it is incumbent upon us to make savings part of the discussion. Yes, it is time for the 'revolution'!

Savings can't be the only what? There has never been one answer to ANYTHING in the world of development work - be it work on poverty, poor health, drought, civil unrest, gender-based violence, etc etc etc. I accept and agree that savings isn't the only answer, but I wonder why we are so driven to get to THE answer or to the formula that combines things in such a way to give us THE answer.

I feel the work we do regarding savings, financial services for the poor or financial inclusion or whatever you want to call it, should occur in an incremental fashion. Build on what we (and more importantly, savings group members) learn and go from there...without trying to jump too quickly to what the end model should look like. For me the journey is just as important as the destination.

I think answers should be flexible and agile - responding to changing environments, marketplaces, idiosyncrasies of a place. Now, the principles upon which this 'revolution' should be based are a different story. Principles form a bedrock from which answers flow or evolve. We must start somewhere and evolve from there.

I think a more interesting discussion could be...on what principles is the savings revolution (for lack of a better term) based? And further, to steal a quote from David Hulme I think it was (forgive me if the attribution is incorrect) "Whose reality counts?" Is it the experts perspective which should be given the greater weight? Or the users of the financial services? A balance of both? Who does the balancing?

One very important lesson I have learned over the past few years is how different things look when you actually have to carry out your own recommendations. I sometimes shudder when I think of some of the findings, conclusions and then recommendations I meted out over the years as a consultant - as if the 'answers' were so easy. As a consultant, it always seemed so clear what needed to happen in a given situation. Now, however, I have been taught the very hard lesson of humility and I realize that perfection only exists as an ideal, not as a reality. So now I believe that it is good enough to start somewhere and follow what is learned. I agree with Kim that we should not pretend that we have THE only answer. Having said that, I don't think we should apologize or allow others to 'pooh-pooh' savings-based methodologies because they aren't the whole answer. My attitude is that while savings isn't the only or complete answer - it is a damn good piece of it!

What I have taken as my motto now is....

"Let not perfection stand in the way of good enough"!

Mon, February 6, 2012 | Jill Thompson

Brett Matthews takes up the same subject and the same virtual conference with his usual eloquence on his Village Finance blog (

Brett says:

"Watching the microfinance world from the standpoint of a practitioner for the past 12 years, I have found that the most tragic aspect has been how ‘the forgotten half of microfinance’ was first remembered, then acknowledged to be absolutely critical, then placed on the ‘to do’ list — and then, year after agonizing year, pushed further and further down it."

Thu, February 9, 2012 | Paul Rippey

I'm not inclined to think that savings are a magic bullet, but in the absence of other ordnance it will do for the moment. The beauty of savings is (as we all know) that it reduces vulnerability and increases option for people who can't really absorb much risk, while credit does, sometimes, just the opposite. But the most impoprtant part, for me, is that it is one of those very rare things in development - it allows the people who do it to take over a much bigger percentage of their development agenda and (at least in the case of savings groups), allows us to become quickly unimportant and go and do something else - or the same thing somewhere else. There is an unswerving imperative in development to figure out the next step instead of allowing the next step to be something that people we work with figure out for themselves. Sometimes it's OK (as they say on British fireworks) to light blue touch paper and retire and, at least from the limited studies we have at hand, the results are not so very depressing. Might a cynic suggest that lack of interest on the Gateway could reflect a reality that there's much less professional mileage in savings compared to debt?

Wed, February 22, 2012 | Hugh Allen

Interesting perspective Hugh.

I like the idea of letting the next step get figured out by the so-called beneficiaries.

I tend to agree with the professional mileage comment too!

Wed, February 22, 2012 |  Jill Thompson

NB: Originally published January 2012. Still timely article and comments, so we changed the date to bring it closer to the top of the list. 

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