Washington: Using handheld devices, motorbikes and even smartphones, micro-lenders such as ShoreBank International hope to give poor communities access to safe and affordable ways to save their hard-earned cash.
Such innovation is being driven by a new project funded by the Bill and Melinda Gates Foundation, which said on Wednesday it will give $38 million (Dh139.5 million) to help 18 micro-lenders explore ways to make savings accounts available to 11 million poor people across 12 countries in Africa, Asia and Latin America over the next five years.
"This signature package of grants represents our first bold effort with the microfinance community to provide poor people safe places to save their money," said Bob Christen, director of Financial Services for the Poor at the Gates Foundation.
"We see it as a major step to drive change and help broaden the microfinance business model to include savings," he said.
Until now, the blossoming micro-credit market has focused on delivering tiny loans to the poor but has failed to master micro-savings. This is mostly because delivering such services is expensive given the limited number of people with small deposits.
Creative solutions
Now the foundation hopes the grant money will help microlenders find creative ways to give the poor savings accounts using existing client bases in some of the world's poorest countries.
"We have learned in our work there is a very strong demand from current micro-finance borrowers for savings products," said Laurie Spengler, president of ShoreBank International.
