Two different strategies are pursued by outside agencies (be they development or private sector) and by poor people themselves as they seek to design and deliver financial services. The former tend to use a strategy of “permanence and growth” and look to create sustainable institutions that deliver financial services to an ever increasing number of clients – such as MFIs, banks, and co-operatives. By contrast, poor people generally use a strategy of “replication and multiplication” and look to create many small self-contained, often self-liquidating, schemes – such as RoSCAs and Christmas clubs.
There are no magic formulas for designing appropriate savings products for poor people: it requires market research and careful, systematic product development. But the rewards for the Microfinance Institutions that undertake these exercises in terms of profits and client loyalty can be remarkable, and well worth the investment.