Even giving away can be a form of saving
Rural development in developing countries can be stimulated by giving credit to farmers or groups of farmers. However, experience shows that this is accompanied by a risk of indebtedness and dependency on the donor.
During a three-year joint research programme of Wageningen UR and the Food and Agricultural Organisation (FAO) savings of the poor formed a central theme. This programme was brought to a conclusion last week with a three-day international conference in Wageningen.
One important finding was that savings should be considered within the context of a livelihood strategy. Depending on their position, people save in kind or in cash, and in groups or as individuals. Tanzanian cattle keepers, for example, save and borrow cattle. Immigrant rice cultivators in the same village, on the other hand, borrow money or grain from relatives or lenders. Elsewhere, in Zimbabwe, giving is seen as a way of saving: the receiver will sooner or later feel obliged to give something in return.
John Rouse of FAO said in the concluding discussion on Wednesday 14 May that the perfect saver had not been identified during the conference. However, he commented, "One clue is that the successful saver is often a member of a group." Dr Otto Hospes, researcher in the Agrarian Law Group at Wageningen University and coordinator of the WUR-FAO programme, commented that indebtedness of the poor is an urgent problem. "Microfinancers are queuing up at the door of the poor. Debt and dependency are linked, and the machinery can't be stopped just by trying to change the ways of microfinancers."
Commenting that microfinance can be likened to a runaway vehicle without a driver, one participant suggested that the social scientists present at the conference should themselves become the drivers. Understanding the sociological side of savings and debt could provide policy makers with the right tools to regulate the problem.
Hospes invited the participants to further develop perspectives on savings and debt, referring to the words of the Chairman of the Board of Wageningen UR, Professor Cees Veerman, who had said at the opening session that Wageningen would like to contribute to such sociological and anthropological research.