

Gates Foundation aims to facilitate banking to the poor - cwan
http://news.yahoo.com/s/ap/20090921/ap_on_re_us/us_reaching_the_unbanked

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dimas
This is a great initiatives and I am supporter of any kind of philanthropy but
saving accounts is not the best way you can help those people. I have been to
these places, not to say people do not have any money , they have nothing to
eat. Saving account will not provide them with food unless you deposit the
money and educate them on how to use it wisely. They have to be fed first and
educated, then come saving.

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cwan
Having actually worked in one of "these places" (in microcredit in Uganda and
evaluated programs in Kenya) I can tell you that providing a safe place to
bank is one of the best ways to help people. I suppose the first step is to
define what you mean by "these places".

If you're talking about a war torn country or a country that is ruled under a
radical ideological agenda (e.g. Venezuela, Zimbabwe, Iran or North Korea)
and/or with high inflation, yes, I'd agree that savings probably aren't really
going to be important to them.

For the vast majority of developing countries however, most are not starving
on a day to day. However, they may make a lot more money one day but none the
next - so it's this variance that creates risk and why financial services of
all types (credit and savings) help to smooth out the risk. To get a sense of
the risk, try imagining yourself living in a room without locks in a
neighbourhood with a high level of crime - what would you do with any extra
cash you had? Contrary to popular belief, the poor often have an immense
capacity to save - in the microcredit I worked at, there were those who joined
to borrow small amounts of just so that they could access the network and
save.

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dimas
You got a good point there, but education is integral part of the process as
well. Some people do not know how to save and have no trust to any
institutions. They need to get help to overcome that barrier

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cwan
People respond to incentives - that is the the fundamental idea on which
economics is based. The poor aren't as helpless/stupid as much of the
developed world makes them out to be. This was one of my frustrations while
working in the developing world. While I now work largely in China at least in
China they don't assume that in order to help the poor that education comes
first - they have first provided the conditions that businesses can meet the
needs and employ the poor (one of the reasons China's growth exceeds much of
the developing world and especially those who rely on "aid").

We claim that providing financial services will provide empowerment (which it
does), and then we try to force them to conform with our view half a world
away with how they should spend and save their money by structuring financial
products according to our needs as opposed to theirs. They don't need an
education to save - that the service exists and incentives to save exist are
enough as they will quite quickly educate themselves in that regard. No level
of "education" will disabuse someone (anyone let alone a poor person in the
developing world) of the notion that their government isn't corrupt or that
they can "trust" an institution. Trust is earned. What you will have, like in
any society, is first the incentive/need, then the early adopters and then
word of mouth and that's how institutions earn trust.

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known
Great initiative. Some time back I wrote a letter to Gates Foundation citing
that when 85% Indians do not have any bank account it is very unlikely that
your money is actually reaching the poor.

<http://tr.im/kJHv>

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jyellin
I think that it says that money is not the root to all evil when used to help
those who are in need...give for the sake of giving!

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cwan
Money's not the root of all evil. It's the _love_ of money that is the root of
all evil which, fwiw is a biblical reference (1 Timothy 6:10).

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hughprime
Slightly off-topic, but what does it say about Bill Gates that his foundation
is called the Bill _and Melinda_ Gates Foundation?

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die_sekte
That his wife plays a significant part of his life?

