Understanding and Responding to the Savings Behaviour of the Low Income People in the North East Region of India

This paper examines saving needs of the low-income population in India's North Eastern Region (NER). It analyzes existing saving practices, challenges people face and opportunities for formal sector institutions.

The qualitative research on savings was conducted in Assam, Meghalaya, Manipur and Tripura to understand the needs of the low-income population and design appropriate products to meet them. Findings indicate that:

• Savings is practiced through informal, semi-formal or formal mechanisms in the form of cash, kind, or account-based savings;
• Savings in-kind is most prevalent among low-income people, often for want of a better option;
• Most people prefer to save with a secure and accessible formal institution;
• Formal savings services are inaccessible due to limited outreach, ineffective products and insensitive staff;
• Rich people are the highest users of formal institutions and the poor the lowest;
• Semi-formal institutions such as self-help groups and MFIs cater more to the poor and the lower segment of the not-so-poor category.

Based on client responses, the study identified four products to serve NER’s low-income population. In conclusion, the paper states that creative product design is both a challenge and an opportunity for financial inclusion.