This report documents the major practical approaches to mobilizing the savings of the poor, focusing on innovations that new savings providers might utilize to overcome key challenges. In particular, the report addresses challenges at the client and institutional levels in order to identify the areas of intervention that hold the greatest strategic importance for practitioners. An important objective of the report is to provide knowledge to savings practitioners working with people living at the bottom of the pyramid that these practitioners can use to dialogue with the broader financial services sector, as well as inform their efforts to significantly increase the number of new savers among the world’s poor.

“Savings as a Cornerstone: Laying the Foundation for Financial Inclusion” reports on the state of practice in savings mobilization for the poor in developing countries, a topic that is approached through a dual framework that examines: (1) the value of savings and (2) operational challenges. These two foci are supplemented by limited reflections on the policy environment. The report documents the major approaches of financial institutions to mobilizing savings among very low-income people, focusing on methodological and technological innovations that may be useful for delivering quality savings services. It aims to guide these practitioners to resources that will enable them to further expand their understanding of the how and the why of savings.

Wide-scale savings mobilization is fundamental to building inclusive financial systems. It is now widely understood that savings has great potential impact. This insight is grounded in evidence that the poor do save in cash and in kind—whether as a way to build assets, manage household cash flow, or effectively cope with risk. However, much of their savings remain informal and outside of the financial system. The World Bank’s Global Findex reports that only 16 percent of adults in the bottom two income quintiles (lowest 40 percent) of low-income countries have an account at a formal financial institution, compared with 86 percent of adults in the bottom two income quintiles of high-income countries. Closing this savings gap is central to any strategy of financial inclusion and equitable economic development.

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