Giving India’s Poor a New Way to Save


Santosh Daniel is the project manager for Grameen Foundation’s Microsavings Initiative in India.

Anju Jaiswal lives in a remote village of Dheena in the state of Uttar Pradesh, India, where she and her husband, Ghanshyam, own a small kirana, or grocery.  Using a loan from Cashpor, a local microfinance institution (MFI), Anju is able to stock her family’s store with vegetables, provisions and other essential household items.  Her store serves the surrounding agricultural community, which can make earning a regular income challenging as most of her clients have seasonal farm jobs.  She uses most of the income she earns from the store to feed her family, often leaving very little for savings.  When the family is able to save, they keep their savings at home, like many other poor households.

For poor, rural households like Anju’s, opening a savings account poses several challenges.  The nearest Cashpor branch, for example, is 10 kilometers (about 6 miles) from Anju’s home, which means she would have to spend valuable time away from her business to go there.  In addition, the prospect of opening a savings account can be overwhelming for households that tend to have little schooling and low literacy skills.

On the other side of Uttar Pradesh, another Cashpor client, Sangeeta, lives with her husband and in-laws.  Sangeeta and her husband work in the family business in the remote village of Chaubeypur, making cardboard boxes used for packing sweets.  Though her husband has a bank account with one of the national banks, it’s often difficult for him to go to the nearest branch to deposit his savings because of distance and time constraints.  In fact, his account has been dormant for the past year and a half.

Thanks to Grameen Foundation's Microsavings Initiative and the work of its partners Cashpor (a local microfinance institution) and ICICI Bank, Sangeeta is now able to save a little each week to provide security for her future.

Thanks to Grameen Foundation's Microsavings Initiative and the work of its partners Cashpor (a local microfinance institution) and ICICI Bank, Sangeeta is now able to save a little each week to provide security for her future.

Poor, rural households face three common challenges when it comes to banking with a formal institution:

  1. Many of them don’t use existing bank services because they’re too far away and don’t offer the services they need
  2. They typically have very small sums to deposit, making the long trip to the bank not worth the time they lose
  3. They are intimidated by documentation required for opening accounts because of low literacy and lack of self-confidence

To meet these challenges, Cashpor – in collaboration with ICICI Bank and Grameen Foundation – began in June 2011 offering the Apna Savings Account to more than 379,000 female clients, as well as non-clients, living in Uttar Pradesh and Bihar.  To date, Cashpor has enrolled more than 15,000 new savings customers – including Anju and Sangeeta – in more than 140 branches in five districts.  The demand for Apna (which means “ours” in Hindi) has been extremely high, with 300 to 500 new savers being added daily.

The savings product is designed to help the client overcome the challenges above.  Staff members conduct new-client enrollment via mobile phones, using the phone number as the account number.  Cashpor savings officers travel to clients to take their savings deposits (which clients can also make using their mobile phone), much as they do with traditional micro-credit clients. Deposits are then automatically updated, so clients can immediately check their balance using their phones.  Clients also can deposit, withdraw and send remittances through their phone using their mobile savings accounts.

As the project has grown, the partners have faced a few challenges in implementing the mobile savings account.  The biggest obstacle has been overcoming the cultural barriers in India to women owning a mobile phone, which is seen as a tool of the young and not respectable for Cashpor’s clientele, who are largely in the 31-45 age group.  However, when one group member decides to use the phone, we’ve seen that it is a powerful example to the others in the group.  In fact, 80 percent of Cashpor’s customers do have access to a phone (either their own phone or one they share with the rest of the household), so the potential for them using this savings account is large.  Current Cashpor clients and also non-clients are also expressing a strong willingness to buy a phone so that they can have access to formal-sector financial services.

For many women, having a savings account provides security. The savings provide a safety net for emergencies or household purchases, which is critical for poor women, who sometimes find it difficult to own property or assets.  At first, Cashpor’s clients feared their husbands would be able to check their balances on their phones, but now they’re realizing that saving with Cashpor provides more, not less, security for their savings.

The lives of Anju, Sangeeta and others who’ve taken up the new savings service have changed for the better. Grameen Foundation and its partners are working to bring safe, reliable savings accounts to poor women in rural India, provide quality customer service and use innovative approaches that will create a sustainable change in the lives of millions of poor women and their families.


5 Responses to “Giving India’s Poor a New Way to Save”

  1. Matthew Snyder Says:

    This is encouraging to read! We’re working on a savings program with another faith-based MFI. We cannot wait to see what comes from it. Keep up the good work!

  2. Daniel Milstein Says:

    Giving India’s Poor a New Way to Save is a good article about india’s life.This is an article about a lady in u.p in india and her husband who are illiterate and dont use challenges of banking. so be aware of the banking guys..

  3. Gaurav Singh Says:

    Good one Santosh!

    Providing saving services for the poor is one the key tools to helping the poor move out of poverty. The Grameen Foundation microsavings project is already path breaking given the insights it is able to provide on all the stakeholders- Clients, MFIs, banks, technology etc.

  4. Elizabeth Davidson Says:

    Great examples of how important mobile banking can be to reach marginalized populations!

    I would be interested to know what fees are associated with mobile banking through Cashpor as compared with traditional banking fees. In the short term, reaching as many customers as possible is a valuable goal; however, in the long term, we need to protect rural clients so that they truly do receive equal and fair access to financial services.

    Also, what steps are being undertaken to protect clients mobile accounts from hacking? Given the prevalence of cell phone hacking in the more developed world, the security of mobile-based accounts is concerning.

    • grameenfoundation Says:

      Elizabeth, thanks for your your questions! Regarding the fees, the clients are required to pay a one time registration fee of 100 rupees, and a annual fees of 50 rupees for choosing an unlimited annual transaction plan,

      Regarding security, there are three levels:
      — At the first level, the client’s mobile number is registered with the technology company
      — At the second level, there is the Oke-Key signature booklet that the client receives, which has a string of six numbers plus four random blanks for the customer’s PIN; each such booklet contains 50 unique signature string numbers
      — And at the third level of security is the customer’s four-digit PIN, which of course should be known only to the customer

      Thus, if the customer loses their mobile, the person finding or stealing it cannot make transactions unless they also get the Oke-Key booklet and know the customer’s PIN.

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