A Gold Thread: Building Assets and Courage among SEWA's Microfinance Members
This paper discusses the need for designing financial services products for the poor, taking into account both the clients' financial needs as well as the product's ability to build confidence and courage in its client base. It uses SEWA's development of a savings product for gold as an illustrative example of how a product can meet needs that are both practical (building assets) and strategic (building courage).
SEWA's initial view was that women should spend less on gold and more in "stable" investments. Closer inspection into why women buy gold revealed that gold plays a variety of economic and cultural roles. SEWA sought to design a savings product for gold. Market research determined the following:
- Gold serves as a form of insurance;
- It acts as long-term savings for weddings and education;
- It is an important gift for weddings and other social occasions;
- It is used as collateral against which loans can be accessed;
- Gold jewelry is a personal asset for women, gold bars are in joint or husband's control;
- Most women save money to buy gold vs. borrowing to buy gold.
Using this information, SEWA developed a savings product for gold with:
- Variable terms from one to five years;
- Installments that are small and frequent;
- The option to withdraw in either gold or cash.
