“Most people think that if you’re living on $1 a day or $2 a day, it’s impossible to save,” Jonathan Morduch
tells ECSP Director Geoff Dabelko in a discussion of his book, Portfolios of the Poor: How the World’s Poor Live on $2 a Day
. The Woodrow Wilson Center hosted Morduch and his co-author, Daryl Collins
, for presenations
at the Center and on Capital Hill last September. “[I]n fact, because of being poor—not despite it—households were spending a lot of time building up for the future.”
“What was really critical about what this new work was showing was that poor households were strategizing, they were making decisions,” says Morduch. “They were, essentially, juggling, active in ways that had been hidden from sight with the bigger surveys.” Now revealed, this knowledge creates opportunities for policymakers to help poor households in new ways, such as reducing regulatory costs for financial institutions seeking to service poor communities.
Morduch says microfinance and microcredit schemes are doing well, but that they are not enough to serve poor communities’ entire financial needs. “The next steps involve embracing what’s already going on and making products, devising products, that are even more flexible or even more appropriate,” he says. Households have a diverse range of needs, from food and water to financing health care and education, and Morduch says these diverse needs merit diverse solutions.