How Gambians save and what their strategies imply for international aid

Interventions in this small impoverished West African nation have been based mainly on credit ( debt ). Public and private lending institutions have failed dramatically, with the resultant mounting debts. Yet, lenders continue extending loans into the countryside. The author suggests that there is room for new options. One of these is for financial intermediaries to subsidize savings rather than credit. The author looks at length at the question : How do Gambians save? Saving takes many forms other than money, including livestock, jewelry, store crops, and resaleable household goods. Gambians do not prefer liquidity. They often convert wealth into forms that shelter it from the daily demands of spouses, kin, neighbors, and from their own temptation. Gambian farmers choosing saving options weigh trustworthiness and convenience more heavily than real or nominal interest rates or inflationary losses. The author concludes that the Gambians need a balance between credit and saving, liquidity and illiquidity, individualism and group responsibility.