4 ms·
Do you actually get the prevailing n-month CD rate of interest in that scheme, or is it purely to teach fiscal discipline? What's the point of collectivizing it
by brianpgordon 8y ago
Do you actually get the prevailing n-month CD rate of interest in that scheme, or is it purely to teach fiscal discipline? What's the point of collectivizing it? And it seems like people poor enough that they can't access traditional banking products would have a real problem with lack of liquidity if they have an emergency and need their savings immediately.
- bsanr2 8y agoI think you answered your own question. The "lack of discipline" is not an internal failing, but an externality imposed disproportionately on poor people/PoC. Therefore, a savings product that makes access difficult in most cases but not impossible (for true emergencies), and without onerous penalty should access be necessary, makes its usage more palatable, even with the lack of interest.
- anitil 8y agoThe episode goes in to this. Typically these are people who would struggle with traditional financial institutions, and so they harness peer pressure as a savings tactic.