Leo Tobias is Grameen Foundation’s Technology Program Manager of the Solutions for the Poorest Microsavings Initiative.
Offering savings programs for the poor can be challenging. First, the microfinance institutions (MFIs) that want to offer these services are competing with a variety of alternatives, such as home-based savings (under mattresses, in strongboxes, etc.), or keeping money with relatives or neighbors. Second, offering savings products fundamentally changes the relationship between the MFI and its customers. When clients only want loans, making that the primary purpose for their interactions with the MFI, there is a standard process. Taking voluntary customer deposits radically changes that relationship, to one that is initiated by the customer and that involves varying amounts of deposits or withdrawals. In other words, the customer interaction is less predictable. At any time of the day or night, the customer can ask for her balance and withdraw from it.