Building Financial Resilience: How Financial Service Providers can Help Low-Income Customers to Manage Risk
Throughout the world, people have long used informal savings mechanisms (ISMs), such as chilimba, stokvels, and susu, as tools to manage risk and build financial resilience: different types of ISMs help low-income people prepare for, and recover quickly from, a variety of both predictable and unpredictable financial shocks.
Financial service providers (FSPs) have an opportunity to support and enhance that resilience by developing services that enable ISMs and their members to manage risk better. FSPs can help ISMs and individuals to build greater resilience by offering them a diversity of client-centered products adapted to their needs, and leveraging the use of technology to ensure a viable business model.
Savings at the Frontier partner FSPs have developed such customer-focused services. This paper showcases a range of these services and presents reasons why ISMs and their members might find them valuable.