The recent onslaught of flooding around the globe has highlighted the devastating impact natural disasters can have on people regardless of where they live. The damage to homes and livelihoods, however, is particularly felt when victims have no form of financial security.
Currently, millions of families in developing countries don’t have access to savings services because they don’t have the minimum deposit most commercial banks require (some two-thirds of the world’s adults still do not have a basic bank account). Their savings come in such small increments that most banks are not prepared to offer them an account. In addition, many people living in poverty don’t have or can’t afford documents such as birth certificates, which are needed to access traditional banking services.
Because savings is an economic necessity, people living in poverty must find other ways of keeping their money. Without many alternatives, some hide their money in hollowed out bamboo poles, in boxes under their beds, or in a hole in the ground. They also put their money into assets, such as livestock or pieces of jewellery. But assets offer little security as they are vulnerable to their environment–they can be stolen, deteriorate or be destroyed by natural disasters. People living in poverty need savings that are both safe and liquid, offering a safety net against crises such as floods.
Opportunity International offers savings products that enable people in poverty to securely deposit and save small amounts of money. Often without a minimum balance requirement, these savings accounts enable families to plan for unexpected expenses and can lessen the devastating impact of natural disasters.
With homes, families and livelihoods destroyed, survivors of the recent floods in the Philippines are faced with the overwhelming task of rebuilding their lives. Microfinance empowers families to recover from tragedy and reshape their futures.