Nick Kristof on Nicaragua’s Savings Revolution

I just read an excellent column by Nick Kristof of the New York Times about savings programs in Nicaragua. It seems like a natural follow-up to the post I wrote about reasons to resist microfinance in Nicaragua, as it presents a productive solution to the problems of poverty and usurious lending practices.

Here’s part of it:

Right now, the world’s poor almost never have access to a bank account. Cash sits around and gets spent — and, frankly, often spent badly.

“We used to buy a three-liter bottle of Coke every day,” recalled Socorro Machado, a 49-year-old homemaker in a village here in northwestern Nicaragua. That was a bit less than a gallon, and the cost of $1.75 consumed a large share of the family’s budget.

Then Catholic Relief Services, an aid organization, arrived in the village with a new program to promote savings. It provided a wooden box with a padlock and organized savings groups of about 20 people who meet once or twice a month, typically bringing 50 cents or $1 to deposit in the box.

Some of the money is lent out to start a small business, but the greatest benefit of these programs seems to be that they provide a spur to save.

“Now we buy a bottle of Coke just once a week, and we put the money in savings,” Ms. Machado said. She saves about $5 a month in her own name and another $5 a month in her son’s name and has plans to buy a computer for him eventually. [more]

No Pago! Reasons to Resist Microfinance in Nicaragua

This post originally appeared on myKRO.org on November 16, 2009.  I highly recommend clicking through to read the excellent comments from people who know more about Nicaragua.

“Why would borrowers in Nicaragua protest against microfinance?” my friend Michael asked me a few days ago.

Michael and I both majored in Latin American Studies at Berkeley. His email re-ignited my excitement for microfinance in Latin America. When I was studying abroad in Chile I interned with an organization called Accion Emprendedora, which sparked my interest in the intersection between business and social good.

Michael sent me this fascinating article: “No Pago” Confronts Microfinance in Nicaragua by Elissa Pachico: more »

The Man in the Fountain, Wal-Mart, and China’s Course of Development

Email sent to friends and family, October 19, 2006. It inspired many responses.

Ni hao jiaren he pengyou!
(That means, “Hello family and friends”)

I hope this note finds you well.

Living in China has complicated my perspective on international development. It casts a different light on my experiences in Chile and my idealistic Berkeley education. I started thinking about this when I read that microfinance inventor Muhammad Yunus won the Nobel Peace Prize. more »