With all the debates over debt forgiveness and all the pleas for aid, surprisingly little attention has been paid to how the poor already help each other, and what can be done to improve the systems that they already use.

This is the introduction to a very interesting interview with Daryl Collins in the Boston Globe:

“A new book, “Portfolios of the Poor: How the World’s Poor Live on $2 A Day” takes a detailed look at the daily income and expenses of 285 families in South Africa, India, and Bangladesh, studying how they pay doctors when their children get sick, put food on the table when they’re out of work, and pull together money for weddings, funerals, and holidays.

Daryl Collins, a former professor at the University of Cape Town, ran a team of six field workers in South Africa who kept “financial diaries” on 152 families, visiting them every two weeks to ask specific questions about how they managed their money.

Far from living hand-to-mouth, it turned out, these households had complex financial strategies. A sheep intestine seller paid $30 at a time into a “savings club” with three friends who took turns going home with a $120 pot. A rickshaw driver living in a one-room house saved enough when times were good to buy a life insurance policy and stow away a half a month’s wages.

The complex picture that emerged is a key to easing poverty, says Collins, who now works at Bankable Frontier Associates, a Somerville-based consulting firm that aims to extend financial services to the poor.”

Read the whole interview here.

An example …

Money guarding: “If you get a fairly decent chunk of money, you give it to a money guard, a neighbor or relative or friend that you trust and say, “Hold this, and don’t let me touch it.” Sometimes the same money guard asks you to hold their money, and so when someone comes to borrow money, you say, “It’s not my money.” It works.”