In Zambia the poor people use largely the informal and to a lesser extent semi-formal savings systems to accumulate long-term lump sums in preparation for life-cycle events. This study shows the importance of savings for smoothing out peaks and troughs in income and expenditure. Death and illness were found to be the most frequent emergencies during the study. This report outlines that offering savings services to the poor represent a tremendous opportunity for microfinance institutions (MFIs) to increase their depth and breadth of outreach in Zambia. Yet in Zambia there is a legal framework that does not allow MFIs to accept deposits from the public. Although a new legal framework is now in place, it is not yet effective. It also provides specific recommendations for improving product design and methods for linking informal savings services/systems into semi-formal and formal sector financial service operations and recommendations for MFIs seeking to introduce or diversify savings products into their portfolio of services.

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