Some observed behaviour patterns in rural BoP households

By | May 14, 2009
Collage by Dave Tait

Across the regions, we saw patterns of financial behaviour (download PDF) that echoed similarities of intent and goals. For example, at peak times such as the post harvest season, wealth was often stored in the form of grain (rice in the Philippines or wheat in India) and then converted to cash through the course of the year, on demand. Wealth was also stored in the form of pure silver in India (long term, in form of ornaments).

Cashless transactions were far more common in India and Malawi, keeping a significant proportion of the community's wealth within the community. These behaviours ranged from simple barter to sophisticated exchange mechanisms like a preset 'currency' conversion rate of wheat to money used for grocery shopping or even the use of goats to buy a mobile phone. The Indian community also had the system of an annual cooperative retainer in the form of wheat by which farmers were assured of the
services of the local carpenter.

Also people rarely held on to money in the form of cash for any length of time, for the most part due to lack of access to banks and/or the high cost of maintaining an account proportionate to their incomes. Cash was rapidly converted to goods based on priorities and these 'goods' acted as insurance (silver), savings (buying building materials on a piecemeal basis as cashflow allowed until the house could be built), a cushion aka insurance (selling a pig for an emergency or eaten for food) and finally investment (milk bearing cow, young piglets to rear to maturity, etc).

Finally, we saw patterns of sharing and cooperation within communities where groups would invest and save together, for example the sophisticated bank based ladies lending circle in India; share the cost of a resource or asset, such as in Malawi where cooperative bee farming was observed or in India where the farmers shared the carpenter's annual fees. In the Philippines sharing and cooperation was observed more in the form of voluntary service (social capital) where a barkada helped in the building of a house without the need for any formal transactions.

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