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Dave Killion — April 10, 2011

It is difficult, I think, for westerners to understand poverty in a meaningful way, being so removed from it as we are. Although we can intellectualize the notion that there are people who must survive on less than $1 or $2 a day, I doubt many of us can imagine how that works out in practice. Those interested in the nuts and bolts of such an existence may wish to get hold of “Portfolios of the Poor“. From the website –

“(Portfolios of the Poor: How the World’s Poor Live on $2 a Day ) tackles the fundamental question of how the poor make ends meet. Over 250 families in Bangladesh, India, and South Africa participated in this unprecedented study of the financial practices of the world’s poor.

These households were interviewed every two weeks over the course of a year, reporting on their most minute financial transactions. This book shows that many poor people have surprisingly sophisticated financial lives, saving and borrowing with an eye to the future and creating complex “financial portfolios” of formal and informal tools.”

As worthy as this book is, I think most readers may find it a little dry and technical.


Fortunately, those interested in this fascinating topic have an option that is equally interesting, more entertaining, much more concise, and best of all, free – “The Poor and Their Money”. Stuart Rutherford’s examination of money management by the poor in developing nations provides some startling revelations. Among them –

Poor people can and do save, even if the amounts are often small and irregular.

Poor people need usefully large lump sums of money from time to time, for many different purposes.

For most poor people, those ‘usefully large lump sums’ have to be built, somehow or other, out of their savings – because there is no other reliable way to get hold of them.

I find the bottom up development by the poor of the mechanisms to accomplish their goals intriguing and inspired. These works, in combination with others such as “The Beautiful Tree” (reviewed here) go a long ways towards showing that the poor are not helpless beings awaiting rescue, but rather are industrious, resourceful individuals who can prosper when not deprived of the freedom and incentives to do so.




David C says

Dave: Thanks for this info. I find this subject fascinating.

— April 11, 2011

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