With rigorous economic research and practical policy solutions, we focus on the issues and institutions that are critical to global development. Explore our core themes and topics to learn more about our work.
In timely and incisive analysis, our experts parse the latest development news and devise practical solutions to new and emerging challenges. Our events convene the top thinkers and doers in global development.
Nicholas Kristof's column today is about the promise of microsavings. He starts by describing what must be a Village Savings & Loan Association (VLSA), operated by Catholic Relief Services in Nicaragua:
“We used to buy a three-liter bottle of Coke every day,” recalled Socorro Machado, a 49-year-old homemaker in a village here in northwestern Nicaragua. That was a bit less than a gallon, and the cost of $1.75 consumed a large share of the family’s budget.
Then Catholic Relief Services, an aid organization, arrived in the village with a new program to promote savings. It provided a wooden box with a padlock and organized savings groups of about 20 people who meet once or twice a month, typically bringing 50 cents or $1 to deposit in the box.
Some of the money is lent out to start a small business, but the greatest benefit of these programs seems to be that they provide a spur to save.
“Now we buy a bottle of Coke just once a week, and we put the money in savings,” Ms. Machado said. She saves about $5 a month in her own name and another $5 a month in her son’s name and has plans to buy a computer for him eventually.
Kristof also cites the Dupas & Robinson randomized study showing benefits of microsavings for entrepreneurs.
For more on VLSAs, see the notes from my interview with Hugh Allen; this fine report from CARE, which pioneered this particular approach to savings groups; or this CARE video. On MatchSavings, which Kristof mentions, see this post, which contains a video of an excellent discussion.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.
Recently CGD hosted the Second Annual Birdsall House Conference on Women, which focused on beyond-aid approaches for women’s economic empowerment, with particular emphasis on private sector engagement. CGD experts have written about how international organizations and national agencies should examine and correct gender biases in the design and delivery of their strategies for financial inclusion. But while public sector interventions are crucial for promoting women’s economic empowerment, the panelists pointed out that the private sector is in many ways better equipped to provide opportunities for women to grow their businesses, investments, and incomes. Here’s our takeaway.
On Monday, Grant Shapps, the UK's Minister of State at the Department for International Development, kicked off DFID’s Energy Africa campaign at an event hosted by the Shell Foundation designed to help his team figure out how the UK government can invest its political clout and an initial £30 million ($46 million) to tackle rural energy poverty in Africa. Given solar’s limitations and these risks, how can we make sure that Energy Africa fulfils Minister Shapps’s ambitious brief?