The Wisdom of the Group: How Lessons from Savings Groups Can Guide Financial Product Innovation

November 2014
By Alicia Brindisi, FAI & Julia Siwicki, FAI

The Wisdom of the Group: How Lessons from Savings Groups Can Guide Financial Product Innovation.
Budgeting can be a daunting task for the poor. Poor families must stretch low, often-volatile income to meet basic consumption needs, and handle unforeseen expenses. Despite these challenges, the poor are able to save. They often do so in small amounts for short periods of time, adding to and spending down savings frequently.  But short-term saving seldom results in long-term assets—it is not a tool for building up larger sums.