For those of you who followed the story of Hamid and Khadeja, the Bangladeshi couple introduced in Chapter 1 of "Portfolios of the Poor", we have an update on them from Stuart Rutherford’s recent visit to Bangladesh. We are excited to learn the couple is healthy and their household finances appear to have become further diversified and formalized.
The family is very much together and still living in Dhaka but in better housing. The second son is now eight, in school and well. Hamid seems to have put his poor health behind him and is still driving an auto-rickshaw (natural-gas powered these days). His income is up, as is Khadeja's. It is Khadeja who has changed the most: she is much more
self-confident and is running a very busy one-woman sari-selling business. Between them they now earn about 14,000 taka a month ($199 USD) – considerably more than in 2000 and 2005. At market rates the four of them are now earning per capita $1.68 a day, or $4.28 PPP.
Hamid and Khadeja still live in rented housing, Hamid still hires the auto-rickshaw, and they have very few physical assets - we estimated a total asset value of only 61,000 taka (less than $1,000 USD).
They are still intensive financial tool users. In 2000 Khadeja had hesitantly taken out her first MFI loan. She is now an established member of two reliable giants - BRAC and ASA. Regarding loans, she has 36,000 taka from BRAC (around $500 USD) and 26,000 ($370 USD) taka from ASA, and is repaying both in a timely manner. At ASA she also has a compulsory loan insurance account with a few dollars in it. Most funds have gone into saris, with some into various forms of consumption. She also has 5,000 taka from a SafeSave replication.
Regardless, Hamid and Khadeja (especially her and increasingly him) are still keen on saving. Khadeja’s regular MFI savings balances are 3,600 taka at ASA and 8,000 taka at BRAC. She also has a commitment savings account at ASA where she saves 300 taka a month and expects it to build to 18,000 within five years (she's half-way there). Hamid has a formal bank commitment savings account in his name, which he started 3 months ago. He puts 1,000 taka into it a month and hopes it to build to 120,000 taka (including interest) on the ten-year maturity: the current balance is 3,000 taka. Hamid and Khadeja also put money into a 5-year term informal mutual (an ASCA) run by people in Dhaka who come from their home district: they have a current balance of 24,000 taka. They can take a loan but have chosen not to do so yet. Khadeja still runs a piggy-bank and puts a handful of rice aside each meal, and has done so ever since we first met her.
Much of this chimes with themes we have noted as we have done the revisits both in Dhaka and the countryside: incomes are up, money flows more easily, there's a trend to save more and borrow less, fraud and losses are minimal, and costs are not crippling. Nevertheless, it is interesting to note that Hamid and Khadeja still use informal methods, whereas we've seen a trend away from them.