Bank Accounts and Actual Poverty Reduction

I am not naive. I know I lead a fairly privileged life. I grew up middle class, worked my way through university, got a job, paid off my student loans. Saw the world. Made great friends, had fantastic experiences, brushed off the day-to-day bureaucracy as par for the course. Loved my work. Met my husband in a meeting at the World Bank (epitome of aid worker romance, obviously). I’ve had my fair share of challenges: language barriers, career changes, working mom, stay-at-home mom. The same as everyone. My three year old has leukemia and is undergoing chemotherapy for another year. Life is certainly not easy, as anyone with sick kids can tell you. We have insurance, but lack the family support as we’re away from both of our home countries. We have good days and bad days, and lots of in-between days. My health has suffered, so has my husband’s. We’ve had friends to lean on, to listen to our worries, to offer a shoulder, or chocolate cake. Some days feel like the end of the world. But I know they are not. I am not worried about where the next meal will come from or if we have a roof over our heads. I am not worried about being exploited or my children being exploited. I am not trying to keep my family safe in a war zone or refugee camp. My life is complicated and stressful and emotional but honestly, it’s not hard.

I say this because I have literally spent the past two days trying to open a bank account. But because I don’t work here, and am tied to my husband’s visa, I don’t have the proper documentation to open an account. Plus there was an outrageous minimum deposit requirement. Sure, we’ll just skip on rent this month, shall we? Which has me shouting one minute and crying the next. Due to some dodgy paperwork on the part of a former landlord, our security deposit was returned via cheque in my name. Which I can’t deposit. Super. I can’t decide if I’m more angry about red tape or stubbornness on the part of the land lord.

Sitting in a taxi on my way to a doctor’s appointment, Starbucks latte in hand (see, pretty honest about my privilege), I had one of those lightbulb moments about why it is so difficult to climb the ladder from poor to not-as-poor. Banks. If people can’t open an account, they can’t save. If they can’t save, they can’t access finance. If they don’t have the right documentation, no account. And because banks always (ALWAYS) ask for two forms of identification, even if someone has a proper government issued ID, they probably don’t have an employment contract. I read somewhere a few months back about the number of people who work ‘under the table’ globally, and it is staggering. The number is so large it puts into question the GDPs of a number of countries as well as unemployment rates. Anyway, no contract, no bank account.

Getting ID? What a process. The time wasted that poor people can’t afford to waste dissuades them from making much more than cursory attempts. It’s just too damn hard. It’s unbelievably frustrating. When life is already super hard, do you really wanted to go stand in line to be rejected over and over? (I consoled myself with chocolate) Probably not. So they just get on with it.

There are a lot of organizations which work to try to increase access to finance. There are micro credit and revolving schemes. But the problem is saving. Without bank accounts, saving is unbelievably difficult (just ask my maid, whose mother has been pilfering her savings, and our nanny in our last post – family constantly asking for loans that never got paid back – because the money was at hand, not safely stored away in a bank which was much less convenient at 8pm in a town with only one ATM.) (Note: we helped our previous nanny and current nanny to set up bank accounts. They tell us it has been the biggest factor in helping them to get ahead).

So, let me oversimplify this complex issue just a bit more. Maybe if opening an account required only one proof of ID (birth certificate? National ID card?) and the minimal of minimum deposits, people might start getting ahead. I am not clueless – this still leaves out so many – those without proper ID, those who don’t have proof of residency (as more and more people migrate from rural to urban areas and informal settlements grow), but it does help A LOT of people.

No one is asking for a free pass at life, but maybe it could be just a little bit easier. And the obvious place to start is to make it easier for people to save by making it easier to open bank accounts. What a novel idea.

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