0:00:01.785,0:00:05.785
Microsavings is a hot new idea [br]in development economics.

0:00:06.865,0:00:10.122
It addresses a basic problem [br]faced by many poor people.

0:00:10.122,0:00:14.716
Let's say you have a small amount [br]of money, say, equal in value to $150

0:00:14.716,0:00:16.808
and you want to set up a savings account.

0:00:16.808,0:00:19.690
If you take this money to a large bank,[br]they'll turn you away

0:00:19.690,0:00:21.509
or maybe they'll even laugh at you.

0:00:21.556,0:00:25.325
The cost of processing the papers, [br]setting up the account, and dealing with you

0:00:25.325,0:00:29.339
means it's not worth while for them [br]to take care of your very small deposit.

0:00:29.873,0:00:33.631
The results is that a lot of this money[br]just sits around the homes of poor people

0:00:33.631,0:00:36.609
and it's vulnerable to fire, it's vulnerable to theft.

0:00:36.721,0:00:40.347
In fact, a lot of savings gets destroyed [br]by some kind of catastrophe

0:00:40.356,0:00:42.823
or maybe it's taken by [br]someone visiting the home.

0:00:42.888,0:00:46.450
And a lot of poor people, in fact, [br]would actually be willing to pay money

0:00:46.450,0:00:50.388
to have some opportunity to save [br]their money in a secure place.

0:00:51.858,0:00:55.507
The microsavings phenomenon[br]is evolving through a few different routes.

0:00:56.530,0:01:00.495
Nonprofits for instance are trying [br]to set up or encourage opportunities

0:01:00.495,0:01:04.461
for very poor individuals to be able [br]to save very small sums of money.

0:01:04.461,0:01:08.252
For instance, the Gate's Foundation [br]has been very active in this area.

0:01:09.683,0:01:14.721
Another medium for microsavings has been[br]actually the cell phone or technology.

0:01:14.721,0:01:17.313
Using cell phones in [br]some parts of the world,

0:01:17.313,0:01:20.448
it is possible to save [br]and store your money

0:01:20.448,0:01:24.397
and transfer it to other people [br]while using electronic technology.

0:01:25.899,0:01:29.601
Finally, banks in many countries [br]face burdens and regulations.

0:01:29.601,0:01:31.875
To the extent these regulations[br]can be moved,

0:01:31.875,0:01:34.232
it will be cheaper [br]to supply banking services

0:01:34.232,0:01:36.973
and banks will be more [br]interested in serving the poor.

0:01:36.973,0:01:39.816
That too will make microsavings easier.

0:01:41.041,0:01:45.364
Microsavings is, in general, considered [br]a very promising idea for the future.

0:01:45.364,0:01:47.622
If you'd like to do [br]more reading in the area,

0:01:47.622,0:01:49.956
here is one good paper on the topic.