Recently different events have taken place, including the ProSavings Colloquium and Foromic, in which different participants have engaged in discussions around the topic of financial inclusion and I would like to reflect upon certain aspects.

Firstly, it is important to reiterate the importance of financial inclusion as an essential tool in the fight against poverty and the role of savings as an entryway for low-income people. Savings help stabilize household consumption, plan for future expenses, and avoid losing assets or becoming over-indebted due to emergencies; in this way savings help reduce vulnerability and eradicate poverty.


Psychological aspects are not only key to the design of a savings product, but they also play a fundamental role in financial education. This notion aligns with the concepts found in Xavier Martin’s Note 3: Keys to Success with Commitment Savings.

I have always said that financial education is a broad concept that can consist of a comprehensive program on different financial topics, or could also be delivered through a series of short lectures provided by financial institutions to its clients. Therefore, it is important to define a clear objective when looking to design and implement a financial education program or strategy: Do we seek to promote financial inclusion or do we seek to promote making better financial decisions? Such were the points presented by Maria Jose Roa, Researcher at the Latin American Center for Monetary Studies – CEMLA, during the financial education seminar organized by Fasecolda (Federación de Aseguradores Colombianos) this past February 12.


Last week, during the Latin American Savings Groups Forum that took place in Bogota, several interesting discussions dealt with linking informal savings with the formal sector – a topic that is of great personal interest to me as well as to the ProSavings team.

Several points of view were introduced during the discussion, including two extremes - one which suggested thinking of savings groups as potential clients within the financial system, and another which advocated for linking savings groups to the financial system as part of the model for graduating from this methodology. I would like to revisit some of these messages.


Today, Christmas savings is one of the most popular commitment savings products in Latin America and the Caribbean. It consists of savings small amounts throughout the year and withdrawing the full savings during the month of December, in order to front the costs of the holiday season. According to Xavier Martin’s research, in the LAC region there are currently 128 Christmas savings products, out of which 115 are offered by cooperatives and only 13 by banks and other institutions.

According to the article, “Commitment savings. Exploring the market,” in the LAC region, Christmas savings has even led to the founding of cooperatives. In the case of Colombia, what in 1972 began as a Christmas savings group among 33 employees of a car assembly company today has become one of the largest savings and credit cooperatives in Latin America – the Cooperativa Confiar. Similarly, Cooperativa Cotrafa, founded in 1957 by 161 textile workers from the company Fabricato, formalized the “natillera” or informal savings group to which they made weekly contributions from their wages.


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:


Early in 2013, the ProSavings team announced the launch of a study that set out to do what no one in the realm of savings and financial inclusion had done before, map and analyze the commitment savings product supply in 26 countries of Latin America and the Caribbean – thus contributing to filling the huge knowledge gap that remains in the region.

In an interview with Andrea Reyes (ProSavings Program Coordinator) and Fermin Vivanco (MIF Sr. Specialist), who originally devised and supervised this study, they talk us through the process of conceiving this study and their reactions to its results.


Throughout the year, we have spoken about commitment savings and its benefits. We know that commitment savings is also known by other names, such as contractual savings or planned savings. We also know that, unlike other types of savings, commitment savings incorporates features that help clients save small amounts, periodically and flexibly; such that, over the course of time, these savings can be used towards one or more predetermined ends.

Nonetheless, it is difficult to come up with a strict definition to this type of savings, given the many product designs in existence. This is why the ProSavings Program launched a study on commitment savings, now available through its official site. In the first of four articles about this study author Xavier Martin, presents the main attributes that he identified as characteristic of commitment savings products, and can be applied to the entire region.


As we have mentioned previously, savings play a fundamental role in nurturing the well-being of low-income homes, especially in cases of need, or of unexpected expenses to which these families are often exposed to due given their highly vulnerable financial realities. 

In this post we would like to highlight the role of women in household finances, particularly in terms of savings. As Xavier and Avril mentioned in their savings group blog post, most groups are made up of women whose main goal is often to offer their children a better education. Yet, they also save to provide for other purposes such as food, housing, investing in the business or in case of health emergencies.


During my last trip to Santo Domingo I was able to confirm what has been stated in numerous occasions – There is no single solution for the same problem. Despite encountering similar populations and contexts, there is definitely no perfect recipe that can apply to all the countries of one region.

Working on developing formal savings products for the lowest-income population, we have identified that while it is important to offer liquid savings accounts, it is in fact planned savings that best respond to the needs of this segment. To this end, the following have been identified as some of the key elements for guiding the design of these types of products:


PayPal wants to help you send remittances from outer space, but the real opportunity for remittance product innovation is here on earth.

On June 27th, electronic payment leader PayPal announced the creation of PayPal Galactic, an initiative that claims to be the first step towards making intergalactic payments a reality. According to PayPal President David Marcus, “…one thing is clear; we won’t be using cash in space. PayPal has already pushed payments onto the Internet, onto mobile phones and across terrestrial borders. We now look forward to pushing payments from our world to the next, and beyond.”  While the idea of receiving a remittance from an aunt living on Mars certainly seems like science fiction, PayPal deserves credit for pushing the envelope on new markets for money transfer products.


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