By Daryl Collins, Jonathan Morduch, Stuart Rutherford, Orlanda Ruthven
Financial management strategies of the world's poorest people
Subject
Themes
Portfolios of the Poor presents groundbreaking research that challenges common assumptions about how the world's poorest people manage money. Through detailed yearlong financial diaries tracking nearly 300 households across Bangladesh, India, and South Africa, the authors reveal that even those living on less than $2 per day engage in sophisticated financial planning far beyond mere day-to-day survival.
Portfolios of the Poor presents groundbreaking research that challenges common assumptions about how the world's poorest people manage money. Through detailed yearlong financial diaries tracking nearly 300 households across Bangladesh, India, and South Africa, the authors reveal that even those…
Portfolios of the Poor emerged during a pivotal moment in the global development discourse, when microfinance was experiencing both unprecedented growth and increasing scrutiny. Published in 2009, the book arrived as the microfinance sector was grappling with concerns about mission drift,…
One of the most significant findings of Portfolios of the Poor challenges the widespread assumption that people living on less than two dollars a day exist in a state of hand-to-mouth survival, spending every penny as soon as it arrives. Through meticulous tracking of nearly 300 households across…
While public attention often focuses on the absolute level of poverty (living on less than two dollars per day), Portfolios of the Poor reveals that the irregular timing of income presents an equally significant challenge for poor households. This cash flow volatility, rather than just low earnings,…
One of the most compelling findings in Portfolios of the Poor is how poor households manage to accumulate large sums of money for major purchases and life events, despite their severely constrained incomes. The research reveals that poor families regularly need substantial amounts of money, not just…
Portfolios of the Poor reveals one of the most devastating aspects of poverty: how health emergencies rapidly transform into financial crises that can destroy years of careful planning and accumulation. The research demonstrates that for poor households, medical problems represent far more than…
One of the most significant contributions of Portfolios of the Poor is its challenge to the conventional microfinance orthodoxy that dominated development thinking at the time of its publication. While microfinance institutions focused primarily on providing small loans for microenterprise…
Chapter 1 establishes the central thesis of Portfolios of the Poor by introducing the groundbreaking research methodology and challenging fundamental assumptions about how the world's poorest people manage money. The authors begin by contextualising global poverty, noting that 2.6 billion people…
Chapter 2 delves into the daily financial management strategies of poor households, focusing on how they manage cash flows to ensure basic survival despite irregular, unpredictable incomes. The chapter introduces readers to Subir and Mumtaz, a family of seven living in Dhaka's 'fire slum' on…
Chapter 3 examines how poor households cope with emergencies and unexpected shocks, revealing the devastating impact these events have on families already stretched to their financial limits. The chapter demonstrates that for poor households, risk management is not about optimising insurance…
Chapter 4 explores one of the most remarkable aspects of poor households' financial lives: their ability to accumulate substantial sums of money for major purchases and life events despite living on minimal daily incomes. The chapter challenges assumptions that extreme poverty prevents capital…
Chapter 5 examines the complex world of interest rates, fees, and pricing structures in the financial services used by poor households, revealing that conventional economic analysis often misunderstands how pricing works in practice for the world's poorest people. The chapter challenges simplistic…
Chapter 6 examines Grameen Bank's transformation from its original rigid microfinance model to the more flexible 'Grameen II' system, using additional financial diaries to evaluate how these changes affected poor households' financial management. This chapter provides crucial insights into how the…
Chapter 7 synthesises the book's findings to present a vision for improved financial services that could better serve the world's poor. Drawing on insights from the previous chapters, the authors outline principles for designing financial products and policies that match the complex realities of…
By Daryl Collins, Jonathan Morduch, Stuart Rutherford, Orlanda Ruthven
Subject
Themes
Portfolios of the Poor presents groundbreaking research that challenges common assumptions about how the world's poorest people manage money. Through detailed yearlong financial diaries tracking nearly 300 households across Bangladesh, India, and South Africa, the authors reveal that even those living on less than $2 per day engage in sophisticated financial planning far beyond mere day-to-day survival.