David Bornstein, writing in the New York Times Fixes column, discusess the kind of savings groups which IPA is evaluating in several African countries. These groups, called Village Savings and Loan Associations (VSLAs) are run by the participants who save together, and can be alternatives to microcredit. They have the advantage of allowing individuals to save up for expenses in advance, rather than take out high interest loans when those expenses come up, and don't require banks or other third party lender involvment. As IPA founder Dean Karlan says in the piece:
â€œWhat makes this nice as an intervention is that it needs no financial infrastructure to make it work,â€ explained Dean Karlan, a professor of economics at Yale University and president of Innovations for Poverty Action (I.P.A.), which conducted a three-year randomized controlled evaluation of the Saving for Change program in Mali, and CARE's V.S.L.A. program in Ghana, Uganda and Malawi. â€œIt needs no bricks and mortar. You just demonstrate it, walk people through it, and they can keep doing it.â€
The full piece is available here.