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| Melinda Gates (left) with HRH Princess Maxima of the Netherlands at the Global Savings Forum 16 November. Photo courtesy the Gates Foundation. |
Melinda Gates made the announcement at a two-day forum on global savings hosted by the Foundation in Seattle, the first event of its kind focusing on the role of savings in the developing world.
At the summit, Gates urged leaders in government, banking mobile communications, and international development to work together to build a new kind of financial infrastructure to bring savings to the poor.
“This is an amazing moment. The stage is set for incredible breakthroughs,” Melinda Gates told nearly 200 influential world leaders who gathered for the the two-day forum, as quoted in the press release.
“As last week’s statement on savings by the G20 proves, financial inclusion is on the global agenda at the highest level. And innovations are happening so fast that, for the first time, the world has the opportunity to provide even the poorest people with access to financial services.”
Savings accounts are in great demand by the poor in the developing world. Research shows that when they are offered side by side with loans, people chose savings over loans at rates of up to 12:1. In one study, Malawian farmers who were given the option to put aside some of their earnings toward the next planting season increased their farming inputs by 64 percent, resulting in 54 percent higher farm revenues, and 30 percent higher day-to-day expenditures.
New research also shows that safe savings options can empower women, help people manage risks, like illness and job loss, and increase investment in livelihoods. Still, less than 10 percent of the world’s 2.5 billion poor have access to formal financial tools.
“Savings doesn’t just help people mitigate the risks posed by a medical emergency or a bad crop,” said Gates. “It also gives them the ability to marshal their resources to build something better for themselves and their children. It allows them to fund their own businesses, to look ahead with confidence. Savings helps families to take the giant leap from reacting to events to planning for a healthier, happier future.”
As a part of the foundation’s $500 million pledge, Gates announced a package of six new grants totaling $40 million. The grants support projects and partnerships to improve access to savings and other financial services, including:
- Expansion of bank and microfinance services to include savings accounts
- Implementation of new approaches to reach the poor with savings, such as branchless banking and mobile money
- Research to identify how people use formal and informal financial tools, including savings, credit, insurance, and payment services, and to analyse the impact of financial services on the lives of the poor
The foundation’s Financial Services for the Poor initiative is working with a wide range of public and private partners to harness technology and innovation to bring quality, affordable, and safe savings accounts and other financial services to the doorsteps of the poor in the developing world. Since 2006, Financial Services for the Poor has already committed more than $530 million to explore ways to increase access to financial services.
About the Bill & Melinda Gates Foundation
Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that all people—especially those with the fewest resources—have access to the opportunities they need to succeed in school and life. Based in Seattle, Washington, the foundation is led by CEO Jeff Raikes and Co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.
Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that all people—especially those with the fewest resources—have access to the opportunities they need to succeed in school and life. Based in Seattle, Washington, the foundation is led by CEO Jeff Raikes and Co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.
