Book Review: In their Own Hands by Jeff Ashe and Kyla Neilan

Posted by Terrence Isert, April 16, 2015

The idea that poor people and their families can save anything meaningful seems as ludicrous as the assumption by Muhammed Yunus in 1976 (Price of Dream) that small amounts of credit could help build poor families start businesses in Bangladesh. Jeff Ashe and Kyla Neilan’s In Their Own Hands demonstrates both. In fact, the poor can do so effectively, on their own and with little to no outside help – a departure from the approach of the microfinance movement. When NGOs train participants and then “get out of their way” — these rural and urban groups perform best. Women and men in each group manage themselves and their money more effectively than constant NGO-interaction or supervision.  The savings group movement enables not only the poor but the very poor to do what they could not do before: save first, then borrow from each other and continue the process over and over again without help from the outside.

Mr. Ashe’s chronicles his own personal journey from the Peace Corps volunteer forming solidarity groups in Guatemala to microfinance practitioner in Boston. He admits his own misgivings with the micro-lending movement (see this 2007 SSIR article here) and its microfinance institution-building efforts in the 1990s. He poignantly tells of his own sartorial discovery of these groups thriving in Nepal and his own efforts afterwards to launch them in some of the harshest climatic, economic and political environments across Africa and Latin America.

The novel is a compelling read for anyone interested in exploring a poverty-reduction model that is easily scalable, highly-efficient, low-cost to implement and teaches people and their communities to help themselves by putting the power of choice in their own hands.

The Unbanked and Underbanked: Path out of Poverty

Posted on April 17, 2013 by Terrence Isert

In an effort to increase financial inclusion under a 2005 federal law, the FDIC  is attempting to bring more of those excluded or under-included back into the formal banking financial system in the US. A 2011 survey published last fall by the FDIC and US Census Bureau found that unbanked households in the US rose slightly by 821,000 over a two-year period.  In fact, the survey found that nearly 1 in 4 of all households in the US were found to be unbanked or under-banked, defined as anyone in a household who doesn’t have access to some type of bank account or any accounts at all. Many turn instead to non-mainstream options such as payday lenders or non-bank money-orders to meet their financial services needs. In the US, minorities  are disproportionately excluded with as many half of minority households reported to be unbanked. Financial inclusion is not new or limited to the US. The estimates may vary worldwide, however as recently as 2012 the World Bank calculated that 2.5 billion adults remained unbanked or underserved  although defined more broadly as “no access to any formal financial services, products or institutions”. With the linkages between access to financial services and poverty, even a savings account provides a route to economic stability for many poor households and a potential path out of poverty.