If you or I find ourselves a bit short of money this month then we might skip a utility bill to make it up next month, perhaps dine out a little less, move to a cheaper brand of whatever. The absolutely poor will, if they have less or no money as a result of some calamity, not eat this month. They need that ability to smooth income over time, so as to smooth consumption, even more than we do.

And such smoothing requires being able to save in the relative good times — say at harvest when there is plenty of daily paid work to be had — to cover the hungry weeks.

We can argue about whether the saving ability is more important than the borrowing. But our experience of the use to which people put M-Pesa and the various banking functions within it tells us that saving is considered more important by the poor themselves.

Not for pensions, not for the long term, but just to be able to move money, thus consumption, around in time a few weeks or months and to do so safely. In a manner where putting banknotes underneath the sleeping mat doesn’t manage because thieves and husbands thinking about a drink.

Thus that’s the other thing that we want to add into out anti-beggary campaign. We need the right scale, the right cost, and methods of being able to save. It might just be a few hundred taka that are put aside to cover the food bill if the work dries up, something which a banking system with head offices in Dhaka — glass atriums and air conditioning and all — is never going to efficiently provide.

But that’s what we see the poor want, they knowing best what they need. So, presumably, we should make sure they get it. A system which allows the poor to save is even more important than one which allows them to borrow to invest.

6 thoughts on “Elsewhere”

  1. Mr W,

    I registered and commented on your CT site on Wednesday..

    I receive “waiting moderation” – comment never appears, no email rejection.

    What is going on?


  2. But Aunt A,

    You have your own column at Contins. Can’t you just – I don’t know – poke something?

    Or perhaps Tim will be your 13th letter…

  3. @Tim W

    Re: http://www.continentaltelegraph.com/politics/congratulations-to-scottish-labour-todays-egregiously-manipulated-political-statistics-award-goes-to/

    You omitted that £150,000 threshold for 50% then 45% rate has not increased since Brown/Darling created it.

    Inflation = more earning >£150k pa

    It’s usual Socialist lies to ramp up penalise success agenda.

    btw not heard left howling about “the rich” in Zimbabwe must be taxed more – xxx% earning over Z$150,000 than in 2010

  4. @ Tim
    For me – and I hope for you and most readers – an income shortfall would lead to less discretionary spending rather than failing to pay a debt. “Maxing out” on credit cards is “so” Generation X
    BUT we already know that saving, rather than borrowing, ios more important to the poor, because when capitalism started – with farmers saving “seedcorn” from one crop to plant to generate the next crop – there was nobody from whom to borrow. Borrowing requires pre-existing capitalists.
    There are non-grameen lenders to help kick-start small businesses in Bangladesh (one of my sisters helps, in a small way, to fund one), but I agree that the social capital involved in grameen should, and probably does, help achieve even results than the charitable ones.

  5. Your first comment was some sweary nonsense about how I hadn’t told you you were sacked. I’ve no idea who you are, nor why nor whether you were sacked.

    So, the comment didn’t appear.

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