SEATTLE: The Bill & Melinda Gates Foundation announced a $500 million pledge Tuesday to support projects that encourage poor people around the world to save money.
The pledge Melinda Gates announced at a global savings forum in Seattle will more than double what the foundation has previously committed to help the poor make financial plans for the future — to save for everything from fertilizer to school fees and uniforms.
"They talk eloquently about how savings can transform their lives," Gates said about the female farmers and small business owners in Africa, Latin America and Asia she has talked to about financial services. "Savings gives them the ability to marshal their resources," she added.
As part of the $500 million pledge, Gates announced a package of six new grants totaling $40 million. The grants will expand the foundation's work involving branchless banking and mobile money, and will pay for more research on how people use formal and informal financial tools.
Gates said financial services for the poor are an unusual challenge because it's not just about money. "It's not a resource gap. It's an idea gap," she said.
Transferring money through cell phones, banking kiosks at public markets, and mobile branches driven from one village in the form of a truck are among the new ways people around the world are banking without having to enter an actual bank building.
"The change that we've seen in this field over the past three years is astounding," Gates said.
The Gates Foundation, the world's largest charitable foundation, has brought together about 200 bankers, government officials, regulators, telecommunications companies and community organizers from 38 countries to Seattle this week to talk about working together to benefit the poor.
The meeting comes a few days after global leaders meeting in Seoul, South Korea, added financial inclusion to their development priorities.
In a panel discussion, Janamitra Devan, head of financial and private sector development for The World Bank, said global economic problems have not slowed demand for financial services.
He called for more research to make sure the poorest people are being reached. But when the audience was asked to vote on what kind of research they would like to see, the majority said they wanted more information on how to make financial services for the poor a profitable enterprise.
This was not a conference dominated by nonprofit organizations, like some foundation events.
Devan also expressed interest in using more innovative means to bring banking services to more of the 2.5 billion people in the world who live on less than $2 a day. He mentioned an episode of "Grey's Anatomy" that focused on AIDS, as an example of message placement within TV shows and media.
"The reach from that was enormous," said Devan.
The Gates Foundation announced earlier this year it would be giving money to produce a new Dominican Republic soap opera, or "telenovela," with saving money as a recurring theme. The soap opera expected to begin airing soon also will focus on more typical themes of the genre: relationships and family drama.
Princess Maxima of the Netherlands, the United Nations' special advocate for inclusive finance for development, spoke about the need to offer a variety of services, from savings to microfinance to insurance and consumer protection. She emphasized a need to keep talking about the poor so these new ideas don't just help the low end of the middle class.
Did you find this article insightful?