Portfolios of the Poor, a book written by a group of four authors, gives an insight to the financial lives and struggles of the world’s poor through portfolios they assembled. Specifically India, Bangladesh and South Africa were focused upon through the extensive portfolios of their spending, saving, and borrowing habits. Poverty in the world today is an ever-pressing issue, as there are no definite answers to solve the problem of the astronomical level of poor people that inhabit the earth who live in less than favorable conditions. But, one aspect of great importance to those who are poor is finances and money in general, an aspect that, as this book relays, can be improved, in turn improving the lives of the poor. Although the poor
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Informal financial instruments are also usually free of interest. But the informal tools cannot fulfill all of the needs of the poor, as formal tools would be much more fruitful and secure. What is it then that the poor are looking for in these formal financial instruments? The poor want security, or a sense that when they invest in the microfinance (which are technically semi-formal) or other fully formal instruments, that they will be making a wise investment in which they will not lose their money. In formal instruments, the impoverished are also looking for more than security though.
The poor greatly need better formal tools to save and borrow money. The formal groups must find ways for the poor to trust their companies. The formal groups must bring down the costs of interest or borrowing, because high interest makes it impossible for many of the poor to invest. The formal groups also must increase the speed in which they make their payments to the poor, as the poor often need their money very suddenly when a disaster strikes, such as a family illness or death, or crops being destroyed from flooding. A third problem the formal groups must tackle to better help the poor is better marketing their product. It would seem very easy that many of the poor would be unaware of the various formal opportunities available, since they most likely do not have televisions, computers, or smartphones. The only way the poor may become aware of