Portfolios of the Poor: How the World's Poor Live on $2 a Day
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Portfolios of the Poor: How the World's Poor Live on $2 a Day

3.96 of 5 stars 3.96  ·  rating details  ·  317 ratings  ·  35 reviews
Nearly forty percent of humanity lives on an average of two dollars a day or less. If you've never had to survive on an income so small, it is hard to imagine. How would you put food on the table, afford a home, and educate your children? How would you handle emergencies and old age? Every day, more than a billion people around the world must answer these questions. "Portf...more
ebook, 296 pages
Published May 14th 2014 by Princeton University Press (first published January 1st 2009)
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Mitch
I had the wrong idea in my head about what this book was about. I thought it would be individual stories about people who struggled to get by; the choices they had, the trials they faced, the final outcomes they arrived at.

It is no discredit to the book that it was not. Instead, it was an account of data collected and conclusions drawn from a large number of 'financial diaries' that poor families in Bangladesh, India and South Africa kept over a long period of time. The focus was on how the very...more
Mal Warwick
Understanding the Daily Reality of Global Poverty

This book makes a major contribution to our understanding of global poverty.

Portfolios of the Poor reports the findings of a series of detailed, year-long studies of the day-to-day financial practices of some 250 families in India, Bangladesh, and South Africa, including both city-dwellers and villagers. The authors conducted monthly, face-to-face interviews with each family, focusing on money management and recording every penny spent, earned, or...more
Tinea
A more important study than it is an interesting book, Portfolios of the Poor presents the results of several years' worth of "financial diaries" kept by extremely poor people in India, Bangladesh, and South Africa. The diaries-- detailed interviews conducted with a household regularly over the course of a year-- illustrate how families manage their income and expenses over time. The main "conclusion" of the diaries is that the poorer you are, the more financial management you must engage in. Th...more
Jonathan Biddle
This is a really helpful, data-based book that focuses on how the poor use money and survive on less than $2 a day. One key takeaway is that the poor are not poor because of weak money management skills; their ability to manage multiple sources of money is incredible and puts many Westerners to shame. They are poor, rather, because of their chance societal positioning which is reinforced by lack of access to regular and consistent cash flows and reliable sources of money.

I'll post a fuller revi...more
John Kane
A very solid analysis of the financial mechanisms used by poor households.
Nick Klagge
A usefully different perspective on the global economy. Morduch (a professor at NYU Wagner) and his co-authors structured the book around a series of financial journals kept by poor households in Bangladesh, India, and South Africa. The main takeaway is that the world's poor also tend to be heavy users of (mostly informal) financial instruments by necessity because their incomes are also unpredictable. It was interesting to read the authors' description of how it took their survey team several v...more
Dave Golombek
I started with this book with a much different picture of its subject matter than the reality. Looking at its title, I focused on the subtitle more than the the real title, unconsciously discarding the word portfolios. Because really, how much of a portfolio does someone who makes $2 a day have? Quite a complex one it turns out, even more complicated than my own.

This superb book discusses why the poor need complex financial mechanisms to survive, the problems with the tools that they have availa...more
Kim
This book answers the question "how do people live on two dollars (or less) per day?", and it answers it well. This is an excellent companion to the various international political economy books out there which deal with a lot of very large numbers and statistics, because while those are quantitative studies of problems that a generalized "Third World" faces, this is a qualitative study of how people and families in that World survive (and sometimes thrive) on what would seem to the "First World...more
Jamie
Quite fascinating to learn that the poor need and use various financial instruments; poverty does not mean simply hand to mouth subsistence. The challenge for the poor is that their incomes are low, cash flows irregular and existing financial instruments not ideal due to unreliability and lack of privacy and transparency. No one financial product will provide a complete answer, but access to a portfolio of financial products can help to manage uncertainty and provide greater security and peace o...more
Nick
This is a must read for anyone interested in the lives of the materially poor,especially for those interested in alleviating poverty through financial mechanisms. In particular, chapter 5 on the price of money was especially enlightening and chapter 3 on dealing with risk was also extremely helpful,giving a small glimpse of the now emerging industry of microinsurance. The strength of this book, however, is the approach the authors used in gathering the information. Rather than one-time surveys,t...more
Andy
Some very good ideas, but fairly dry presentation. Portfolios of the Poor describes the findings of four researchers who studied how extremely poor households in India, Bangladesh, and South Africa manage their household finances. Their approach was to select 20-30 case study households per region and study their finances from a longitudinal perspective by tracking their cash flows and household balance sheets over a long period of time. If I were to reduce their findings to a single bullet poin...more
Timothy Smith
This book cuts through the hype about micro finance to describe the reality of how approximately 2.6 billion people live on 2.00 dollars a day or less. They don't generally live hand to mouth and use a wide variety of financial services to survive. The goal of this book and the careful research behind it is to help illuminate what life is like for the poor and what kinds of financial services they really need. This is a ground breaking study that should be required reading for anyone who works w...more
Ryan Greer
This is an incredibly important book for dispelling certain assumptions that we rich folk have in regards to the poor and how they spend their money. The writers did their homework, and provide the global community with concrete ideas for ways to help the world´s poorest climb out of poverty.

With that said, it´s a pretty boring book. Microfinance is a hot ticket right now, and it really has revolutionized the way global economies view the poor, but I really don´t see it as the silver bullet that...more
Anita
Eye-opening financials diaries of very poor people in a few developing countries. Poor people don't languish on the floor all day and bat away flies: they have complex finances incl both expenditures and incomes sources. They suffer from low incomes, lack access to financial tools, and have irregular and unpredictable incomes. Read this as a primer if you're getting started in int'l development and remove your biases.
Hollis
I found this a fantastic and thought-provoking book. THe authors follow the detailed financial transactions of a group of the world's poor (those who live on less than $2/day) from S.Africa, india and Bangladesh. What they find is that despite the size of their income, their need for money management tools is greater than the average. in fact, the amount of total 'turnover' that flows through the households is far greater than a snapshot of their asset value would suggest. It suggests improvemen...more
Naomi
A fine study of how people living on an average of $2/day utilize a variety of financial instruments and practices to manage their money, and reasons for community leaders to provide better instruments and ways to practice this management. Collins et al provide many useful examples, and I encourage other readers to go from this go from this book to Roger Thurow's _The Last Hunger Season_ for an example of how the One Acre Fund is practicing exactly the kind of responsive innovation with its memb...more
Nina
As an academic book I think this book was quite good, I just think I was the wrong audience for it. It would have been an extremely valuable book to read if I were to say work in microfinance or if I were a student of it, but this was far too detailed and repetitive for someone like me who just picked it up because I am interested in the topic. Like so many nonfiction books I have been reading lately, I think this would make a great essay or a feature NY Times Magazine article or something like...more
Gwern
The first 2 or 3 chapters are very interesting and enlightening on the risk borne by the poor and how they do their best to cope; however, the rest is generally repetitive and shows the same data in somewhat different ways and countries, and become boring quickly - making this one of the padded books which would've been a better read as a longform article or essay. (One exception is the discussion of APRs and how the loans actually are done which renders them far less usurious.) Ironically, the...more
Anthony
An insightful look into the financial lives of the poor, based on the financial diaries of about 300 participants from South Africa, India, and Bangladesh between 1999 and 2005.
Kate Schindler
I happened upon this on the library's new books rack. Most financial studies of the poor in developing countries focus on income or one-time assets, but the authors had many families keep financial diaries to track cash flow. The results were fascinating. They explained the popularity and effectiveness of microfinancing, as well as pointing out where improvement was still needed. My favorite chapter, of course, was the one on the Grameen Bank, but each chapter had interesting little stories abou...more
Kathleen
Along with Poor Economics, this book provides an enlightening view into the complex lives of poor households around the world. The financial lives of the poor are far more complex than typically perceived. Through field work and "financial diaries" the book illustrates how people at the bottom of the economic pyramid use multiple financial instruments to manage uneven cash flows. Far from simple, this book eloquently demonstrates how aid and microfinance programs have incorrectly targeted the ne...more
Stefanie
Good information, vital in the right hands, if somewhat dry reading. How people who average $2/day in income manage their financial lives is quite interesting. Even though income is minimal and irregular and access to dependable financial instruments is limited, there is a tremendous amount of borrowing, repayment, and saving in these households; the key is that it happens in small but managable bites while the money is there. Thorough and well-documented research.
Michael
This is a terrific book. I’m sorry I waited this long to read it. The sophisticated way that they study the sophisticated instruments that the poor use to survive on $2 a day in this world in extraordinary. What they have pointed out helps me see things around low income communities in the U.S. better. I want to see if there are folks who have studied this in this country. I’m very glad I read it.
Anna
A lil bit shocked by the title, as I used to managed myself not to spent more than IDR 25K (which is about $3) a day, makes me ideal objected as guinea pigs in this book? oh noo haha.
What I already learn before I read this, is the preface telling that they studied how the poor make their way to adjust their living level.Maybe its applicable to me? hehe
L
Academic & dry at parts, but actually very enlightening about the financial lives of the poor. If you're interested, I'd suggest reading what's interesting to you in the main book, and then going to the appendix and reading all the profiles of individual people there.
Justin TerAvest
This is the only practical study of microfinance I've ever seen, and I have to admit I was totally cluseless about a lot of finance mechanisms until they were mentioned in this book.

It's nice to see some of the harsh reality about dollars and cents.
Wendy
They had a few very good points and repeated them many times so that even if you are stupid you get it. The points were good though - poor people need various types of financial services to help with cashflow, not just loans. I liked the approach.
Nallasivan V
Lacking money is just one of the problems of being poor. Not able to manage whatever money you have a bigger problem. This book is a very good journal of money management at BOP. A good read for bankers and policy makers alike!
Paddy
The thesis is interesting, but this book couldn't hold my interest all the way through. I'm glad people are out there doing this research, but I don't really need to read the raw data.
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