Gates Foundation pledges $500 mn toward poor savings

The Bill & Melinda Gates Foundation announced a $500 million pledge today to support projects that encourage poor people around the world to save money.

The pledge Melinda Gates announced at a global savings forum in Seattle will more than double what the foundation has previously committed to help the poor make financial plans for the future to save for everything from fertilizer to school fees and uniforms.

"They talk eloquently about how savings can transform their lives," Gates said about the female farmers and small business owners in Africa, Latin America and Asia she has talked to about financial services.

"Savings gives them the ability to marshal their resources," she added.

As part of the $500 million pledge, Gates announced a package of six new grants totaling $40 million. The grants will expand the foundation's work involving branchless banking and mobile money, and will pay for more research on how people use formal and informal financial tools.

Gates said financial services for the poor are an unusual challenge because it's not just about money. "It's not a resource gap. It's an idea gap," she said.

The Gates Foundation, the world's largest charitable foundation, has brought together bankers, government officials, regulators, telecommunications companies and community organizers from around the world this week to talk about working together to benefit the poor.

Princess Maxima of the Netherlands, the United Nations' special advocate for inclusive finance for development, spoke about the need to offer a variety of services, from savings to micro-finance to insurance and consumer protection.

She emphasised the need to keep talking about the poor so these new ideas don't just help the low end of the middle class.