My notes from Ignacio Mas’ TEDxSeattle talk “Everyone Needs a Safe Place to Save.”
More than 3 billion people in the world don’t have access to a bank account. Try to put yourself in the shoes of someone who is living on $2 a day on average. On a good day you make enough to buy a latte, on a bad day you make enough to buy a drip coffee. No one is guaranteeing you income on a daily basis. How much do you value the money you make on a good day? You ought to be able to save the money from the good days to pay for school and make larger purchases.
What do people do without bank accounts? They hide money. They use a “rotating savings group” where neighbors make a single pot, and a different person takes the money each week. They buy physical assets, livestock, and goats, but those aren’t liquid, you can’t take a small amount of that money and use it to go to the doctor. They don’t have any good reliable options.
2.6 billion people live on $2 a day. 1.6 billion of those are earners, and 1 billion are dependents. 610 million of the earners are farmers- farmers have to save due to seasonal income, 370 million are casual laborers, 300 million have low-wage salaries, 180 million are micro-entrepreneurs, 100 million are unemployed, and 80 million are fishermen/pastoralists. Most people don’t stay at $2 a day for their whole lives. We need to figure out how to prevent these bad times in their lives.
In Nigeria, 79% don’t bank, and 74% have never banked in their lives. It is simply too costly for banks to put branches in small communities to take $1 or $2 at a time. It’s also too difficult for villagers to access banks. A two hour trip and bus fare means it’s not worth it. We need to get banking out of the branches.
We need to expand banks to corner shops. Install a point of sale terminal that can execute deposits and withdrawals. We should link their bank account to the sim card in their mobile phone.
50,000 corner stores in Brazil are serving as transaction points for banks.
We need to integrate retail, telecommunications, and banking.
Sarah’s commentary
I think a lot of people in the third world might be avoiding banks because of predatory practices, not just inefficiency and lack of branches. We need to have an integrated movement for nonprofit banks in addition to making banking easier. I’m also not sure that people who can’t afford to feed their children are going to see saving as a wise strategy. This seems to be enforcing the western idea of independence and wealth on people who don’t see a need for it.
