Financial Promise for the Poor: How Groups Build Microsavings

Citation

Lombe, M. (2013), "Financial Promise for the Poor: How Groups Build Microsavings", International Journal of Social Economics, Vol. 40 No. 3, pp. 289-290. https://doi.org/10.1108/03068291311291545

This book is a timely and important addition to the field of microsavings. Edited by Wilson, Harper and Kim (colleagues with extensive practice experience), the book offers a comprehensive overview of microsavings programs which is informed by an interdisciplinary perspective. Focusing specifically on the formation of microsavings groups, the authors highlight the nature and defining characteristics of microsavings groups. Challenges and opportunities microsavings groups experience as they attempt to establish themselves are presented. Implications for the field and the clients they are mandated to serve are also underscored. Through vivid narratives, the authors remind us of the potential of microfinance to enhance the welfare of vulnerable individuals and groups especially in resource poor environments.

The authors skillfully locate microsavings within the field of economic development and trace its roots to traditional ways of coping with need/surplus. The book draws attention to social investment strategies and their role in enhancing the capabilities of vulnerable individuals and groups. A number of approaches to microsavings including rotating savings, savings and lending groups, self‐help groups and asset building initiatives are reviewed.

The book is divided into five main parts covering 21 chapters. The first part focuses on microsavings groups formed out of local initiatives. Their theoretic underpinnings and operational principles are highlighted. Using multiple examples from the fields, the authors of the four chapters that make up the first part of the book address different local approaches. An important highlight of this section is the role of context in shaping the group – groups formed respond to the contextual attribute such as local capacity and service gap. Another key consideration is the nature of the groups – they tend to be multipurpose – often playing the role of saving bank, insurance provider and social support.

Part II is comprised of four chapters. The main focus of these is to provide examples of microsavings groups developed and nurtured by external actors in diverse environments – Africa, Latin America and Asia. The authors challenge the notion of externally promoted savings groups. Their entry/presence into the local space is justified on the basis of “evidence based practice” which informs design and group implementation. Again, adaptations to contextual challenges and opportunities are underscored. In the third part of the book, covering six chapters, the authors skillfully present the different approaches currently used to save and conduct financial transactions. Primary among these is the use of technology such as mobile telephone banking and market‐led models. Using examples/cases drawn from several countries, shortcomings and benefits inherent in each of the models reviewed are presented. Part IV reviews the impact of microsavings groups on vulnerable peoples in different environments. Overall, despite the challenges experienced, the evidence suggests microsavings groups have positive effects on people in poverty and their communities. Noted benefits included increased business activities, enhanced leadership skills and increased social capital.

Part V, which is in fact the last portion of the book, is a brilliant interplay of ideas forecasting the field. These are laid out in four distinct chapters. The authors are candid in their presentation of the future of microsavings groups. Both challenges and opportunities are highlighted.

Perhaps the book's major weakness is its failure to clearly articulate rights‐based approaches in programming with respect to microsavings. Another shortcoming relates to the length of the chapters – many of the chapters in this book where too short. While the short length of the chapters may have been deliberate, reflecting the needs of the target audience, this has potential to limit the books usefulness to other publics, e.g. academia and people who want a thorough understanding of the initiative. Nevertheless, the book is well developed and comprehensive, offering a unique perspective to microsavings. Each of the subject areas addressed are thoughtfully positioned. With current trends in marginalization and social inclusion/exclusion, the book fills a void in the field and is likely to be of interest to multiple actors in the field of development. Indeed, practitioners in the social welfare, policy makers and anyone who is concerned about inequality, social justice, and social exclusion, will find the book useful.