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Released: March 19, 2013

Microsavings programs build wealth, pennies at a time

Source: Ylan Mui, Washington Post

The global financial crisis has turned us into a world of savers — including the poorest people on the planet.

Elsa Ligua is one of them. As a food stall vendor in the Philippines, paying for her four children to go to college once seemed unimaginable. But Ligua scrapes together 50 cents every day to give to a savings collector who visits her home. The money is deposited in a bank account that pays interest and is insulated from the daily demands of life below the international poverty line. She hopes to have $200 squirreled away by this summer — enough to pay at least some tuition.

Saving money, even if it’s only pennies at a time, is a guaranteed way to build wealth. The “microsavings” concept is taking root in developing countries where nonprofit groups and financial institutions in the past preached that credit was the key to attaining a better life. But as impoverished borrowers began defaulting on debts at alarming rates in recent years — sometimes with fatal consequences — many organizations began questioning the power of credit.

Read Full Article: Microsavings programs build wealth, pennies at a time