The relative risks to the savings of poor people
Wright, G.A.N.; Mutesasira, L.K.
Small Enterprise Development 12(3): 33-45
2001
DOI: 10.3362/0957-1329.2001.031Document Number: 233627
A study conducted by MicroSave-Africa, which assessed levels of losses experienced by poor people in the formal, semi-formal, and informal savings sectors, is presented. An existing extensive qualitative data set (comprising over 500 group interviews) and an additional 19 focus group discussions and participatory rapid appraisal exercises were complemented with a quantitative survey of 1500 adults in central and western Uganda. The quantitative survey revealed that 99% of clients saving in the informal sector reported that they had lost some of their savings. Of those saving in the formal sector, 15% reported that they had lost some savings and 26% reported lost savings in the semi-formal sector. The qualitative work for this study corroborated these findings. It is suggested that prohibiting microfinance institutions from accepting savings is likely to drive poor people to riskier informal alternatives, and is therefore undesirable.