Journal of Microfinance / ESR Review


This paper describes the money management behavior of 42 low-income Bangladeshi households, half of them rural and half living in urban slums. They were found to be active managers of their financial resources. Thirty-three varieties of financial instrument were found to be in use by the sample households during the research year. As well as using a wide variety of instruments, most households engaged in multiple uses of the instruments: on average each household initiated a new money management arrangement every two weeks. The sums of money involved are large, both absolutely and relative to incomes. The average “turnover” (the total transaction flows of money through financial instruments) per household was $839 in the yea—a sum equal to about three-fifths of their annual income. The total value of the microfinance market for poor people in Bangladesh probably exceeds $10 billion. Households appear to be using financial instruments of all kinds to build lump sums of money for imm


Stuart Rutherford founded and chairs a microfinance bank in Bangladesh called SafeSave (www.safesave.org) and is a Senior Visiting Fellow at Manchester University's Institute for Development Policy and Management.



Journal Title

Journal of Microfinance

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