Mobilizing financial savings among rural poor

The discussion refutes the common assumption that the rural poor are not only generally unable to save money, but unwilling to do so when it is possible and counters by citing evidence from case studies and farm record-keeping systems. These studies indicate that voluntary rural savings capacities in LDC"s may be larger than originally estimated, and rural savings behavior may respond to economic incentives. Major supporting evidence is assembled from Taiwan, Korea, Japan, India and several African countries. The advantages of voluntary participation in rural savings programs are delineated in subsequent sections; it is argued that rural savings strengthen the financial market and local service organizations and improve household consumption decisions. Next, a strategy to popularize savings programs is outlined, stressing the importance, and defending the feasibility, of inflation-responsive interest rates and secure nationwide deposit insurance programs. An extensive bibliography is appended to the text.