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Portfolios of the Poor: Three-Country Analysis

Capturing the complexity of people’s lives
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This PoP Briefing Note No. 9 examines research samples from the three countries that took part in the Portfolios of the Poor study.

Researchers with Portfolios of the Poor tracked the earning, borrowing, spending and savings practices of 250 households in Bangladesh, India, and South Africa in order to find out how the world’s poorest households manage their financial lives. The study resulted in financial diaries that collected data systematically, while also capturing the complexities of peoples' lives. Commonalities between the 14 locations in the three countries studied include:

  • Every diarist used savings and loans products;
  • Cash flows moving through financial instruments were large relative to income, even in households with low incomes and small balances;
  • Households in all three countries used several formal and/or informal financial mechanisms regularly, even when they had access to MFIs.

The portfolio approach shows the power of well thought-out partial solutions, and the need for improved product design to better meet the needs of poor households. It demonstrates that microfinance providers can help poor households manage money on a day-to-day basis, build savings over the long term, and borrow for all uses.