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Matching Types of Accounts to Types of Needs: Lessons from India

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Bindu Ananth, President, IFMR Trust has written the latest post in a new CGAP Microfinance series on savings.


My colleague and I were once asked at a conference, “So, how exactly does a bank account reduce poverty?” Great question.

If you are a low-income household, among the myriad range of challenges competing for your time and attention; there are two that very likely claim the lion’s share: the everyday problem of managing income-consumption timing mismatches; and the problem of building, over a long term, lump sums that help finance the households’ lifecycle goals such as education, housing and marriage. Portfolios of the Poor provides insightful narratives on the nature of these challenges. In recent years, the imperative to find high-quality solutions to these problems has been well-recognised.

By and large, these problems boil down to one issue: lack of convenient access to ‘accounts’ where one can receive, store and withdraw flexible amounts of value in a safe and remunerative way. This account need not necessarily be a bank savings account. Based on the client needs, the nature of this ‘account’ may change as do priorities around key features—liquidity, returns, and inflation protection.

Read the full post at the CGAP Microfinance Blog.

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