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

3.94  ·  Rating details ·  1,045 ratings  ·  85 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. Portfo ...more
Paperback, 283 pages
Published December 19th 2010 by Princeton University Press (first published January 1st 2009)
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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
Mal Warwick
Jul 16, 2012 rated it really liked it  ·  review of another edition
Shelves: nonfiction
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, o
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
Nov 08, 2013 rated it it was amazing  ·  review of another edition
Shelves: kindle, 2014
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
El Haossasse
Long story short, poor people don't spend their money hand to mouth...
They have many financial tools that help them get through hard times and unexpected events.
These mostly informal tools need to be reinforced by more formal, durable and organized tools.
The book is a result of great research work and is worth a read.
Jun 13, 2013 rated it it was amazing  ·  review of another edition
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
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
Apr 05, 2019 rated it it was amazing  ·  review of another edition
A must read to give you perspective on the ultra poor.

1 in 25 families in the US live on $2 a day since most financial assistance is income based via tax breaks and incentives.

So if you get no income, all you get are food stamps. The poor trade the food stamps at a ratio of $2 food to $1 actual cash to get electricity and heat for their house, and the children starve for the rest of the month. They give their plasma as much as possible, or sell their bodies at a really young age. They try to g
This book was alright. I didn't particularly like how it constantly went from making some sort of sense, like in the introductions and conclusions of each chapter, to simply getting lost in research details. A simpler account would have been more appreciated.

But the central idea behind it was intriguing and thought-provoking. The poor CAN be helped, and poverty CAN be eradicated. The poor need to be provided with more reliable and flexible financial instruments, to help them save better for the
Karel Baloun
Sep 04, 2015 rated it really liked it
Fascinating absorbing stories of survival, along with a scientific data set.

I'm furious that even these most poor people are regularly cheated and stolen from. Reliable financial and insurance products would provide real value here. Facebook/whatsapp could really help.
This book doesn't really tell a captivating story but is an eye opener at so many levels and it makes no claim to solve the challenges of development. Instead it provides helpful advice and observations.

Would I recommend it?
It is well worth the time and effort.
Samridhi Khurana
It is difficult to imagine how a major chunk of the population lives on less than 2 dollars a day. The author has exhaustively covered the financial diaries of such populations inhabiting the rural and urban areas of Bangladesh, India and South Africa. The authors make a convincing case - Micro finance definitely plays a crucial role in financing their basic survival, but there is a long way to go before poverty alleviation can become a ground reality.
Callan Corcoran
Apr 25, 2020 rated it really liked it  ·  review of another edition
Through financial diaries, constituting in-depth interviews on financial transactions every two weeks for a year, the authors offer an insightful look into the complex financial lives of the poor. In particular, this book reframed my understanding of saving and borrowing for those with small incomes. Additionally, it outlined new ways to conceptualize interest rates and fixed fees for small loans. A rewarding, detailed look into the lives of generous interviewees.
Feb 21, 2017 rated it really liked it  ·  review of another edition
Pretty detailed and useful insights into how the poor manage their finances. The varied financial tools used, sometimes complex, and the way this is managed without formal 'financial management' tools or 'advisors' is quite an eye opener.
The initial chapters are very repetitive and unnecessarily lengthy; this could've easily been cut down by 50-60 pages.
Naveen Kumar B V
Jun 25, 2018 rated it liked it
Though it does not offer a gripping read on each portfolio, it illustrates a statistical model of the earnings vs spending patterns, and how people around the world manage to live with unstable income. It shares details on the practices followed by people, local groups, private firms and local banks to help the poor manage their money.
Kike  Hernandez
Definitely an eye-opener. If you want to know how 99% of the world actually lives and what can you do about it, you better read this book. Do you still have doubts about income inequality, universal basic income and the effect that the ever widening gap between rich and poor have on the world? Read this one. I honestly believe every person on the planet should read this book at least once.
This book uses diaries to trace a steady picture of how some of the poorest people in the world finance their lives. The complexity and means show how many tools are currently used, and how many more are needed to better serve this population.
Jan 24, 2019 rated it it was ok  ·  review of another edition
Shelves: novel
This work could have been condensed to a ten page article for the New York Times and had a far better impact. Minutely describing every single way in which ASCAS and ROSCAS can exist is thorough, but the writing of all these possibilities was tedious in its detail.
Yuni Amir
An eye opener. All we need is a basic understanding of human needs. I'd encourage all to read this book.

The amount of efforts eg. Data collections - painstakingly spent time with the focus groups asking probing and personal questions are not an easy feat.
Magda linga
Jan 06, 2021 rated it really liked it  ·  review of another edition
The findings are very interesting. I think for a lot of people it may completely change the way they think about the poor.
The book is a bit difficult to read, though. It’s actually a study with related findings more than anything else.
Saikat Sengupta
Though the book was an 'eye opener' I didn't enjoy reading this book. ...more
Sherreka Burton
May 04, 2019 rated it really liked it  ·  review of another edition
This is great insight on how the poor manages their little to non-existent money.
Aug 04, 2019 rated it it was amazing  ·  review of another edition
Helped me to build an insight on a reality that I only knew because of stories from relatives.
Mahir Bhatt
Feb 26, 2020 rated it really liked it  ·  review of another edition
I recommend this book to anyone who wants understands why poor people are excellent finance manager.
Katie Ouellette
May 17, 2020 rated it really liked it  ·  review of another edition
A little academic and dense but an insightful look at how people manage their money. Every sample household has a savings account of some sort which was something I didn't expect! ...more
Michael Shaw
Feb 20, 2017 rated it really liked it  ·  review of another edition
A Zuck book club book, I found much of the writing rather bland. For a while, I felt the same way about the conclusions—it argues that the usurious lending rates to the poor aren’t really so bad, and that we should have more financial services available to the world’s poor. The rates aren’t bad because its not a fair comparison to think of them as annual rates like we do for longer term, middle class loans. They should instead be thought of as fixed fees.

Now, there’s some merit there—the cost of
Liam Polkinghorne
This review has been hidden because it contains spoilers. To view it, click here.
Jun 11, 2011 rated it really liked it  ·  review of another edition
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 Klagge
Jan 29, 2011 rated it really liked it  ·  review of another edition
Shelves: economics
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
Timothy Chklovski
An interesting study; I was looking for insights about how people more broadly interact with financial institutions and think about their savings and spending. I thought that learning more about the people living on a few dollars a day may provide an unusual perspective.
In a way, it did. The key points are that there is a broad range of borrowing and lending that one engages in, and that having very little income does not mean one does not need to -- or manage to -- save and mostly repay loans.
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Daryl Collins is co-author of Portfolios of the Poor and Managing Director at Bankable Frontier Associates. Daryl’s work focuses on linkages between understanding of low income household financial management and the business case for providing financial services. Daryl, who has extensive experience in managing financial diaries (including in Kenya, India, Mexico, South Africa), also supervised the ...more

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70 likes · 12 comments
“At any one time, the average poor household has a fistful of financial relationships on the go.” 0 likes
“irregularity of their income compounds the problem by ratcheting up the need to hold reserves, or to borrow when the income fails to arrive. For these reasons, we would argue that poor people need financial services more than any other group.” 0 likes
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