Enouraging savings

The fruit-seller across the street from my house in Accra has been asking me for a cell phone for a while now. She says her phone breaks down all the time and that I should get her a new one…and both of us laugh…day after day over the past couple of weeks.

(Its partly my doing, since I initiated with her, the practice of calling her phone to order for fruits (I was too lazy to go wait on the street while she cut the fruit and realised calling her in advance was a better deal). These days, if she doesn’t hear from me, she calls up to ask if I want something.)

A basic cell phone costs around 40 GH cedis ($27). And she has quite a successful business. Inspired by IPA‘s savings studies, I asked her last night why she did not consider saving 1 GH cedi a day to buy the phone? If she saved regularly for just a month, she would have nearly enough to buy a phone herself. She seemed to understand what I was saying, but I couldn’t gather what exactly her response was. She looked partly amused and in general, seemed pretty skeptical. But she did say she will try it. And her son who was around, promised he will help keep the 1 GH cedi aside from his mother every day.

I will have to follow up today to see what she really thought of it. If she doesn’t show much interest in saving up for a phone, does it reveal that she really doesn’t need a phone? I should find out how many of her customers try placing their orders phone the phone. She could just have been trying her luck, since she knows I am a regular customer (often buying her over-priced fruits without a murmur). Or does she consider the cell-phone a temptation good that she wisely wants to avoid spending her money on? Her son is in school and there are bulk expenditures she has to take care of that she probably prioritises above a cell-phone.

On the other hand, if she does decide to save up, I am curious to observe how she goes about it. I would of course be most happy if I learn that she has ways of saving her money so she could satisfy both? Here’s Dean Karlan with some thoughts on what could we do to help people like her save more.

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