This post originally appeared on the SPINNAKER Network
In a recent op-ed piece in the New York Times, Nicholas Kristof highlighted the importance of microsavings in fighting poverty. Specifically, he discussed one Kenyan microfinance institution, Jamii Bora and its role in encouraging asset building as a way to start a business. Kristof follows the story of one woman, Jane Ngoiri, and her path from poverty to micro entrepreneur. When she joined Jamii Bora, Jane was a single mother with no home and no income. Eventually through personalized savings encouragement and training, she was able to save small amounts each week, start a sewing business, buy a home, and send her children to boarding school. However, this rags to “riches” anecdote begins to sour when we learn that an accident and subsequent medical emergency easily wiped out all of Jane’s savings and forced her to remove her children from school.
This story leads us to think that microsavings may begin to pull people out of poverty, but we’re still left asking how they might lead to financial stability. This is where the SPINNAKER Network proves to be an essential tool in helping find ways to adapt and innovate on the microsavings model. The first step is recognizing that there may be savings initiatives around the globe that have begun to chip away at issues such as Jane’s. If we search the savings product browser for things like “medical, health, emergency”, we’ll come across the Oceanic Micro Savings Account offered by Nigeria’s Oceanic Bank. Exploring the product details (“overview“ and “other services”), we find that this product gets at the issue of medical emergencies wiping out savings by offering a health insurance scheme in conjunction with an interest-bearing microsavings account. If we take a look at Oceanic Bank’s institution profile, it showcases a recent publication laying out even more details on the health insurance scheme. By having access to data in this manner, funders, researchers, practitioners, and policymakers across varying markets can find ideas that will lead to faster and more efficient innovation.
The financial stability issue mentioned above is only one of several that face the field of savings for the poor. But it is encouraging that after a problem was identified, it took only a few minutes to find the data and details necessary to begin a conversation on how to find a solution - this is what the SPINNAKER Network is all about. To do this, however, we need help in collecting more data and presenting it in a way that is not only useful, but essential to the wider savings community. With this in mind, SPINNAKER will be conducting a field survey of the savings for the poor landscape in Kenya. If you are a financial institution, network, or individual interested in participating in the study, we invite you to please contact us. After all, the SPINNAKER Network is first and foremost a collaborative effort to tackle the challenges facing the field of savings for the poor and it is only as useful as the community empowers it to be.