WSBI, the World Savings Banks Institute, with funding from the Bill & Melinda Gates Foundation will assist about ten of its members to develop projects to increase affordable, accessible, and sustainable savings services for poor people. The ultimate objective of this program is to double the number of savings accounts for poor people worldwide. Access to savings will give poor people the tools that they need to manage their unpredictable financial lives, build assets, and seize opportunities.
This grant was announced Nov. 16 by Melinda French Gates at the Global Savings Forum in Seattle, Washington, as a part of the foundation’s $500 million pledge to expand access to savings accounts and help the world’s poor build financial security. The pledge included a package of six grants, totaling $40 million, from the foundation’s Financial Services for the Poor initiative, to support projects and partnerships that will bring quality, affordable savings accounts and other financial services to the doorsteps of the poor in the developing world.
“Savings doesn’t just help people mitigate the risks posed by a medical emergency or a bad crop,” said Gates at the foundation-hosted event. “It also gives them the ability to marshal their resources to build something better for themselves and their children. It allows them to fund their own businesses, to look ahead with confidence. Savings helps families to take the giant leap from reacting to events to planning for a healthier, happier future.”
The new $600,000 grant will help about 10 additional WSBI members develop new strategies to increase the number of savings accounts among the poor. Potential countries for support include Brazil, China, Colombia, India, Pakistan, Peru, Sri Lanka, Thailand, and Vietnam. The main deliverable of this project will be a concept paper that incorporates fully defined proposals from WSBI members and that could form a basis for future funding from the Bill & Melinda Gates Foundation.
The grant will support WSBI to work with members to identify potential solutions to overcome the four key barriers faced by savings banks to provide savings services to the poor:
- Lack of proximity: Work to provide cheaper delivery channels that reach poor people where they live and work.
- Inefficient product design: Use market research to determine how to design products that encourage poor people to save.
- Inappropriate pricing: Determine the balance between affordability and sustainability to ensure that poor people can access savings accounts.
- Ineffective marketing and sales strategies: Work to develop marketing using both informal and formal strategies that appeal to poor people and helps them understand the benefits of savings.
This grant was awarded to WSBI as a result of the ongoing 20 million USD programme under which WSBI member banks in Burkina Faso, El Salvador, Indonesia, Kenya, Lesotho, Morocco, South Africa, Tanzania, Uganda and Vietnam are developing marketing strategies and are fine-tuning back office procedures and IT infrastructure to offer a range of affordable savings products for the poorer parts of society.