How do the poor handle money? What do the financial diaries of char dwellers tell us about financial inclusion?

Gopa Samanta,Kuntala Lahiri-Dutt

doi:10.20896/saci.v1i1.16

Gopa Samanta, Kuntala Lahiri-Dutt

Open Access

https://doi.org/10.20896/saci.v1i1.16

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Abstract

Derived from livelihoods surveys and ethnographic material about people living on the chars, or river islands, in deltaic lower Bengal, this paper illustrates the complex, diverse and ingenious ways that the poor manage money. These islands constitute some of the most vulnerable housing locations of some of the poorest communities; state services and facilities do not reach the chars because they are not listed as land in revenue records. It demonstrates that the poor live in a diverse economy where community spirit, family assistance and trust play roles equally important to markets. In doing so, it puts forth a grounded-in-the-field, evidence-based, critique of the slogan â€˜financial inclusionâ€™ that has gained prominence in recent years.

Highlights

Living on Next to Nothing By definition, the poor do not have ready access to money, which is basis to the concept of ‘financial inclusion3’. Dewan (2011) suggests that exclusion from the financial sphere occurs at two levels: the more vulnerable people are kept out of the payment systems; and excluded from the formal credit market itself, compelling them to access non-institutional sources
To investigate how the extreme poor make a living, we look at people living on the chars, or river islands, in deltaic Bengal4
To understand how the poor people survive on low cash incomes and manage what finances they have we need to see what happens inside the household

Summary

Introduction

Living on Next to Nothing By definition, the poor do not have ready access to money, which is basis to the concept of ‘financial inclusion3’. Dewan (2011) suggests that exclusion from the financial sphere occurs at two levels: the more vulnerable people are kept out of the payment systems; and excluded from the formal credit market itself, compelling them to access non-institutional sources. To understand how the poor people survive on low cash incomes and manage what finances they have we need to see what happens inside the household. In an effort to understand the informal sources of credit and money circulation systems within the chars, we explored the financial strategies of households to manage money.

Results

Conclusion