Paper

Reaching the Poorest

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This paper reviews how microfinance helps the poor in Asia and tries to throw light on three main issues:

  • It asks whether the poorest need or want microfinance, and answers that they do and their behavior confirms it;
  • It asks what sort of microfinance services do the poorest want, and answers that it is frequent, close-at-hand access to flexible basic banking services of a reliable kind;
  • It asks how services of this sort can be delivered, and answers that by pushing the boundaries of already learnt lessons.

The paper points out that the Bangladesh diaries showed big flows of money through financial services, and devices proving that even the very poor are active users of financial services.

  • Households are pushing or pulling about 60% of their annual income through financial instruments;
  • At this rate, the microfinancial market for the poor in Bangladesh may have an annual turnover exceeding $10 billion.

The paper concludes that the very poor need financial services even more intensely than the non-poor. The financial services and devices that the poorest find useful:

  • Are nearby;
  • Provide a frequent opportunity to transact deposits;
  • Help save up, save down, or save through;
  • Offer a variety of values, terms and schedules;
  • Recognize that people have many needs for money;
  • Are, most importantly, reliable, which will help the formal and semi-formal sector market their services massively to Asia's poorest.