Use and Impact of Savings Services Among Poor People in Zambia

The paper explores if poor people save, how they use different savings services/systems and the impact of those savings facilities on their household budgets/lives. Drawing from Zambia and using qualitative data gathered from specific microfinance institutions and thier clients, the authors present lessons for MFIs seeking to develop poor-responsive savings services and examine the:

• Reality of microfinance in Zambia;
• Savings services used and those not used by the poor people;
• Perceived advantages and disadvantages of a variety of savings services;
• Social-economic characteristics of the people using these savings services;
• How savings services are used to manage household income/expenditure flow;
• Why some people save in-kind and what financial services might induce them to start monetised-savings.

Findings reveal that:

• The poor do save and that savings have an impact on them;
• Poor people make regular savings for financing life-cycle event;
• Savings are important for smoothing out peaks and troughs in income and expenditure.

Concludes that:

• Zambia's legal framework does not however allow MFIs to accept deposits from the public, offering savings services to the poor represent a tremendous opportunity for MFIs to increase their depth and breadth of outreach;
• Offering easier access to savings may also reduce drop-outs and increases the level of voluntary savings.