Latin America and the Caribbean

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Most practitioners agree that the income volatility experienced by many low-income households is a barrier to poverty alleviation, affecting everything from food security to asset building. In Latin America and the Caribbean, two common forms of resource transfers help to alleviate the problem of income volatility for poor families: government cash transfers and migrant remittances. Cash transfers are regular and predictable. Surveys suggest that remittance transfers are also predictable— in a 2013 MIF survey of Latin American migrants in the United States, respondents reported sending an average of $212 per transfer, making an average of 13 transfers per year. However, the average doesn’t tell you everything about this picture. Emerging qualitative research suggests that at a household level,  remittance transfers may actually be more volatile and lumpy than is reflected in the means derived from large-scale surveys. 

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How much do we know about the strategies being implemented in the region to make offering microsavings both sustainable and profitable? How can we make the most out of market research to adapt savings products in order to make these truly inclusive? Is it possible to link savings groups to the financial system without sacrificing their performance?

These are but a few of the topics that will be addressed in the upcoming “Effective Tools for Inclusive Savings Colloquium,” to be held from November 3-4, 2014 in Guayaquil, Ecuador.

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As mentioned in previous posts, the ProSavings team launched a study on commitment savings in Latin America and the Caribbean earlier this year. The first component of this study consisted on mapping the supply of commitment savings products in the region; which left the team and researcher Xavier Martin, who conducted the study, in awe at the 3,315 institutions found to be offering savings and the 460 entities offering commitment savings products.

Many people may wonder how we arrived at these figures. Here is the full story explained:

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Photo: Cooperativa Microempresas de Colombia

Cross posted from  Citi Blog

Access to reliable and affordable financial products is critical when it comes to saving money for children’s education, protecting against setbacks, or borrowing money to start a business. Globally, more than 2,5 billion people are unbanked or underbanked, lacking access to the financial services necessary to engage in the local economy and safely conduct basic financial transactions. Solutions to many of these challenges come in the form of microfinance institutions (MFIs) that help provide access to specialized financial products.

A common dilemma faced in the sector is how to offer savings products that are both attractive to and appropriate for the most vulnerable populations, but that financial institutions can also support from a business perspective.

The ProSavings Program, created in 2011 by the Multilateral Investment Fund (MIF) at the Inter-American Development Bank (IADB) with support from the Citi Foundation, checks both boxes. The innovative program works with financial institutions to create tailored savings products for recipients of government payments, upon which many low-income families rely, in Latin America and the Caribbean.

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