How The World's Poor Live on $2 A Day

My job often takes me into some unexpected mental excursions. I was reviewing a document when I took notice of a reference in the Annex pertaining to a book entitled "Portfolios of the Poor: How the World's Poor Live on $2 a Day". My online search got me to their webpage, which you can reach by clicking on the pic at the left.

The book is the product of a year's worth of on-the-ground research on the world's poorest, which is defined as households living on $2 a day or less. The research provided some surprising insights into the financial lives of the poorest. Although I wasn't able to read the book (it wasn't available locally), I was able to read the 4-page summary that you can get when you click on the Link tab in the site, along with some other summaries and a free look at the book's first chapter. It was already an enlightening account by itself. For example, it was noted that while middle class households would normally decide which loans to take based on the interest rate, the poor is much more concerned with the flexibility of the payment terms and the availability of credit even if it means higher interest rates. Quite practical if you think about it, but these insights are often overlooked since the focus of most financial planning is on getting the cheapest credit possible.

You can also get more insight by reading the three household profiles found on the main page. Do visit the site and get a fresh viewpoint of the financial lives of poor people. It will definitely impact the way you look at them again.

Financial inclusion is a topic that deals with the provision of basic financial services to the poor. It is closely related to the activities of microfinance, as well as the concept of providing financial access to the "unbanked". The provision of financial services to this segment of the population is also facilitated by the use of e-money, which I have been discussing a bit already. I will be providing more information on these subjects in my future posts.