“The poor face a triple whammy,” Daryl Collins, senior associate at Bankable Frontier Associates and co-author with of Portfolios of the Poor: How the World’s Poor Live on $2 a Day, tells ECSP Director Geoff Dabelko. The Woodrow Wilson Center hosted Collins and her co-author, Jonathan Morduch, for presentations at the Center and on Capital Hill last September. “They not only have low incomes, they also have very irregular and unpredictable incomes…. The $2 doesn’t come every day. If you did have $2 every day, you’d be solving half of your problems.”

Whether farmers challenged with seasonal incomes or small entrepreneurs fighting to cope with irregular daily wages, Collins has found that the poor strive to actively manage their financial lives. Households, however, often lack the regulated financial tools necessary to do so, sometimes leading to creative, local solutions.

In Portfolios of the Poor, lessons from the field uncovered a social grant system in South Africa that provides old-age pension holders and people with young children dependable monthly income supplements. Through comparison studies with countries without similar grant systems, Collins and her co-authors found the importance of dependable cash-flows staggering. “There was a whole financial engagement that could take off around that regularity,” she said. “You didn’t see [that] in India and Bangladesh.”