In our last podcast, we discussed the growing consensus that financial inclusion and asset building can help reduce poverty and how cost-saving breakthroughs in payment technologies are enhancing the impact of social protection. But in order to really understand savings-linked social protection, we need to delve into the question of what kinds of savings methods are best suited to social protection goals - formal, informal, both?
We asked Sarah Rotman, financial sector specialist at CGAP, and Dorcas Robinson, director of food security at CARE, to sit down with us and share their views on what features of formal and informal savings are important when considering how to design products for low-income clients. Sarah discussed the functionality and accessibility of accounts, regardless of whether they are formal or informal, but also pointed to the relevance of a country's general payments infrastructure. Additionally, Dorcas highlighted CARE's village savings and loan associations (VSLAs) and how the root of savings product development is quite simple - savings opportunities must meet the demands of low-income clients. In addition, she stressed the advantages of informal savings groups, such as support and solidarity which are vital social capital for especially vulnerable populations.
This podcast is the second of a two part series on technology, financial innovation, and protecting the poor hosted by the Global Assets Project. The previous podcast in this series featured a discussion with Sahba Sobhani (UNDP) and Jorge Rubio Nava (Citi) on electronic payments, going cashless, and social protection. For more on these topics, check out the live event we recently held featuring Sarah, Dorcas, Sahba, and Jorge titled "Protecting the Poor through Financial Innovation". You'll find video of the event here and a summary of the main takeaways here.
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