Demand for Savings

Savings are important for poor households for several reasons, including:

managing emergencies,
consumption smoothing (in the context of fluctuating incomes),
enabling accumulation of meaningful lump-sums (e.g., necessary to purchase large assets, such as housing, or to make investments in micro enterprises, or to pay for valued life-cycle events, such as education, weddings or funerals),
demonstrating sound financial management habits (e.g., necessary to access other important financial services, such as credit or insurance).

Despite limited income, the poor want to save and indeed do save. Accordingly, there is a high demand for savings mechanisms. However, there is very limited supply of truly useful (i.e., safe, convenient and appropriate) savings mechanisms for poor households in developing countries.

GAFIS supports supply-side innovations

GAFIS seeks to support development and rollout of useful formal savings products for poor households in developing countries. It aims to encourage more than an occasional quick touch between the poor and the formal financial system; it attempts to catalyze deeper and more intensive usage of financial products and services and, in particular, to enhance the usefulness of savings products. We hypothesize that a more useful savings product for the customer will indeed be used more and, ultimately, become a more sustainable/ profitable proposition for the financial institution.