Portfolios of the Poor: How the World's Poor Live on $2 a Day

By Daryl Collins
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"Portfolios of the Poor" by Daryl Collins dives into the lives and financial struggles of the world's poorest people. Through extensive research, the book reveals the daily challenges faced by those living on less than $2 a day and provides insights into their financial choices and strategies.

Utilizing detailed financial diaries, Collins and her team track the financial lives of families in Bangladesh, India, and South Africa, documenting income, expenses, and savings on a daily basis. The book sheds light on how the poor manage their money in order to survive, highlighting their use of informal financial tools such as savings groups, loans from friends and family, and moneylenders.

The authors challenge the notion that poor households are unable to save, showing that even the smallest amounts can accumulate over time. They also analyze why traditional banking and microfinance solutions often fail to address the needs of the poor, often burdening them with high interest rates and inflexible repayment terms.

Furthermore, "Portfolios of the Poor" explores the potential of new financial services, such as mobile banking and microinsurance, to improve the financial well-being of the poor. The book emphasizes the importance of designing financial products and policies that are tailored to the specific needs and capabilities of the poor.

In essence, "Portfolios of the Poor" offers a unique and eye-opening perspective on poverty and finance, presenting a compelling case for rethinking the way financial services are provided to the most vulnerable populations. It urges policymakers, bankers, and development practitioners to take into account the financial realities faced by the poor and work towards creating inclusive and accessible financial systems.
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