“This Note discusses how low-income households move financial value through time using loans and chit funds in order to access large sums of money. It uses Stuart Rutherford’s framework of saving up (typical savings behaviour); saving down (taking a loan and repaying in small instalments); and saving through (insurance and group-based savings systems like chit funds or ROSCAs).

Low-income households often rely on saving down and saving through to move financial value through time. Poor households use informal sector variants of saving down and saving through – at greater risk and cost. This presents an opportunity for financial service providers, as there is a large unmet demand and room for product innovation. The pattern of usage of these avenues also offers notable insights for developing savings products for poor households.”

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