Why have MFIs historically not emphasized savings as much as credit?
In its first two decades, the microfinance “movement” focused more heavily on loans than on savings, for three main reasons: 1. the movement’s aim was to help the poor, who were not thought of as having much money to save; 2. in most countries, new credit techniques, not new savings techniques, launched the movement, and 3. most of the institutions involved were NGOs, which were not legally licensed to collect savings. However, in recent years there has been an increasing recognition that most poor families do save, and that this saving is usually in non-financial form (for instance, stockpiling goods). This is not because the poor prefer non-financial savings, but because they often lack access to good formal savings facilities. The answers to these questions are adapted from Savings Services for the Poor: An Operational Guide, edited by Madeline Hirschland (2005).
