Learning from the poor

In his 1999 essay, “The Poor and Their Money”, University of Manchester academic Stuart Rutherford challenged modern-day assumptions and paradigms about the financial lives of the poor by defending his thesis that “the poor can save and want to save”:

“…when they do not save it is because of lack of opportunity rather than lack of capacity. During their lives there are many occasions when they need sums of cash greater than they have to hand, and the only reliable way of getting hold of such sums is by finding some way to build them from their savings. They need these lump sums to meet life-cycle needs, to cope with emergencies, and to grasp opportunities to acquire assets or develop businesses…”

With this assumption- that the “microfinancial landscape” in poor communities is a vibrant and necessary one-I have approached my research. So what has it looked like thus far?

1 Survey

This 32-item questionnaire assessses respondents’ present participation in community savings groups. It asks about everything from the size of the group to the total amount saved to the reasons for which the money is saved in the first place.

To intimidate people as little as possible, I walk around the community (two different ones, at present) with a community member I pay to help me gain community access. This person (for one of my communities, the guy in my previous posting) also translates the survey as it is administered verbally.

The survey usually takes about 20 minutes, depending on how shy the respondent is, the number of groups they are participating in (1.5, I would say, on the average), and how busy they are at the time we come upon them.

2 Database

My Excel database records the quantitative aspects of the survey. Meticulous data-entry matters because I will be analyzing it at the end of my time here to sketch the microfinancial landscape of my two target communities in a way that is accurate, insightful, and accessible.

Whoever wrote the Excel program deserves a Nobel Peace Prize or knighthood or something. For amateurs such as myself, it is an easy way to make yourself feel legitimate.

3 Field Notes

The third step of my research process is a qualitative one. While numbers and exact answers help one to compare, make generalizations, and think systematically about the nature of one’s research, each respondent’s feelings, attitude, and experiences concerning savings helps to add nuance and insight to my research-and that is not an un-important thing. As such, I regularly write notes about my time in the field, and then analyze them through both reflection and color-coding, where colors represent different labels, such as “generalizations”, “user’s feeling about savings”, “effects of participation in savings groups”, etc.

If that makes no sense just click on the image below.

4 Mapping

Finally, each survey is numbered. These numbers are pin-pointed on aerial maps I have of each community, so we can see how the “savers” and “non-savers” are distributed throughout the community. In short, this is mainly for fun, since I’ll essentially only be able to talk to a handful of people (relative to the entire population of the communities). In other words, a cluster of “savers” in one area doesn’t mean anything more than that-we can’t assume that that is the community’s hot-spot in general for saving money. We can only assume that those households are themselves homes of people who save money.

(Map 1: Sweet Home Farm, an informal settlement. Map 2: Mannenburg, a so-called “coloured” township. Because of the scaling differences (1:1,000 and 1:3,500, respectively), it is hard to tell how much smaller the dwellings in SHF are-they are shacks, where the dwellings in Mannenburg are largely formal, permanent structures.)

5 The Caveat

As I mentioned in the paragraph above, the size of my surveying sample (ie the number of people I talk to) will not be big enough to reliably represent the nature of the community as a whole. For example: even if it is the case that 85% of the people I talk to (say, 80 people in one of the communities) save money in 2 or more groups, this doesn’t mean that 85% of the community’s population save money in two or more groups. So, while my research will be hopefully yield some insight into the nature of group savings in these communities, it will not be information from which it is possible or “safe” to infer things about the communities as a whole. Needless to say, my conclusions and analyses will need to clearly reflect this reality

6 And then what?

That’s a good question. For now, I’m sticking to the above three steps, working hard to spend as much time in my two communities as possible, talking to locals about their participation in savings groups. That is my only goal in the coming 2-3 weeks.