Monday, September 21, 2009

Helping the world's poor to save money

The Bill and Melinda Gates Foundation has issued a new grant that will help develop savings for the world's poor. The grant is 35 million dollars, and will go to help develop saving systems in the third world.

Those who are in poverty in the under-developed world have never had safe places to save their money. While microcredit has done a good job in extending credit to the poorest, savings services has been lagging.

From ABC News, this Associated Press story talks to an organization who will receive some of the grant to spur new ideas for extending savings accounts to the world's poor.

The Gates Foundation is providing an infusion of cash to facilitate the sharing of ideas among the innovators and to make sure the new systems offer a wide range of financial services.

Alfred Hannig, executive director of the Alliance for Financial Inclusion, said banking innovation is happening in developing countries without the foundation's help, but the money will help speed implementation.

The alliance has a goal of reaching 50 million of the world's "unbanked" by 2012.

In a phone call from Nairobi, Kenya, where the alliance was hosting a meeting for representatives of 42 countries, Hannig said that plans are being made for a delegation from Kenya to go to Brazil to learn about that country's efforts to bring banking services to small villages along the Amazon River.

"People were waiting for this," said Hannig, who works for the German Technical Corporation and is based in Thailand. "This was very timely. They have been waiting for such a mechanism for such a long time."

Hannig said 60 percent of the money from the Gates Foundation will be redistributed in smaller grants to groups like the delegation from Kenya to Brazil, and the Bank of Thailand, which wants to measure banking access around the world through a survey.

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