Winston Churchill once said that “saving is a very fine thing, especially if your parents have done it for you.” Contributing to the household economy and providing for children wouldn’t be possible without good money management. This is what entrepreneurs like Eladia, Diana, Teodoro or María did. All them have seen the changes in their lives and in those of their family members thanks to their consistent efforts and the support received from the BBVA Microfinance Foundation.
Since 1924, October 31st has always marked World Savings Day. As the Inter-American Development Bank points out, saving money is important for overcoming future shortages, but above all, it is vital “to achieve progress during times of abundance”.
One clear example is Eladia. This Dominican entrepreneur set up two businesses: one that sells meat and another that sells cloth. By managing her money well, along with everyday work, she improved her home and the lives of her eight children– five of which have already graduated from college. The help from Banco Adopem, the Foundation’s entity in Dominican Republic, played an important part to materialize such a great change in her life.
Eladia, in her house at Espaillat, located in the north of the Dominican Republic
In Diana’s case, it was also Banco Adopem which helped her push through with her guineo plantation and fishing projects. “What’s good with Adopem is that they not only lent me money, they also taught me how to put it to good use”, she assures, while remembering how she was able to escape from extreme poverty.
Economic progress and savings go hand in hand, making it difficult to conceive one without the other. Aware of this rapport, the BBVA Microfinance Foundation not only facilitates access to financial services to vulnerable people, it also gives training and support to clients in implementing their projects. This was Teodoro’s story with the Foundation’s entity in Panama, Microserfin. His main source of income was a small neighborhood variety store, but after several loans, he was able to acquire land, livestock and a bigger store. With all of these, Teodoro helped his daughter fulfill her dream of taking up a nursing degree in the University, a profession that she currently practices.
Despite the efforts of so many people who save day by day, even if they have little money, the numbers reflect that savings in Latin America remain weak, where it only comprises 18% of the region’s GDP. This percentage ranks very low with respect to Asia (34%), or other advanced conomies (23%). The IDB notes this in its report entitled ‘Development in the Americas 2016’. Findings insist that Latin America and the Caribbean “must save more and better” to generate new opportunities for growth, and also to foster more inclusive societies.
“In Latin America savings are scarce and are not put into very good use”
The report stresses the need to promote the “savings culture” and improve financial education since childhood, with the aim to contribute to economic progress. “In Latin America savings are scarce and are not put into very good use. The region faces a serious savings dilemma,” warns Tomás Serebrisky, chief economist for the IDB and co-author of the report. The problem he sees does not lie in “who” saves, but rather, the quality of their savings. This means that how these savings are channeled and how they are being used is also of great importance.
Many times, certain population segments lack knowledge and financial education, making savings a gargantuan effort. This was exactly what happened to María. In the mountains of Pisac, Peru, this entrepreneur was able to progress thanks to the training and support given by Financiera Confianza, the Foundation’s Peruvian entity. “Before, I didn’t know where to keep my money. I thought of giving it to another person for safekeeping. I used to save at home and it would easily get lost”, she explains in quechua. Now, thanks to the entity, she feels her money is safe, and she also knows how to manage it well. “I think of my future, that’s why I’m saving my money”, she says.
These testimonies show that savings is a key element for prosperity, most of all when we consider that it doesn’t only imply cutting expenses, but knowing how to spend. Eladia, Diana, Teodoro and María learned all of these, and now they are harvesting the fruits of what they have sown– a seed that they continue to nurture with their everyday efforts.