Budgeting can be a daunting task for poor famlies - they must stretch low, often-volatile income to meet basic consumption needs, handle unforeseen expenses, and try to build savings. But banks and formal institutions often do not offer savings products to the poor because their small deposits and frequent transactions do not cover the cost of servicing accounts. For rural populations, not having a nearby bank branch is another obstacle to formal savings.
Despite these obstacles, poor families DO save. Savings groups are one tool that poor access as a dependable mechanism for saving. In the latest video from our Financial Access 101 series, we provide an introduction to savings groups, the basic models, and why they help poor families better manage their financial lives.
If you liked the video and want to learn more, visit our Research section on Savings. Also stayed tuned in the coming weeks for additional videos and resources that further explore savings groups and how they can work to serve the needs of poor households.