A must-read book for social entrepreneurs combating global poverty... Skip the latest road-to-riches screed about serving the bottom of the pyramid and throw out your white papers from the World Bank... Portfolios of the Poor is your new bible. -- Jonathan C. Lewis, I on Poverty Too often, conversations about the needs of the world's poor are based on assumptions and cliches. This important, carefully researched, and compelling book presents the facts about the poor and their relationship to finance. -- Tim Harford, author of "The Undercover Economist" and "The Logic of Life" This is an important, boots-on-the-ground look at how microfinance functions in the developing world. The descriptions of how poor households manage their limited resources are exciting, raw, and novel, and I found myself unable to put the book down. -- Edward Miguel, University of California, Berkeley and coauthor of "Economic Gangsters"

A fascinating discussion of the finances of the world's poor. -- Nicholas Kristof NYTimes.com Ten years ago, the authors of this unusual study began collecting detailed yearlong 'financial diaries' from households in Bangladesh, India, and South Africa... The diarists did things that might seem irrational--borrowing in order to save; paying interest on savings--but that made sense given their unpredictable incomes and limited options. While the authors do offer prescriptions for how to expand those options, it's their scrupulous attention to actual behavior that makes this book invaluable. New Yorker The book's methodology and conclusions are fascinating. Publishers Weekly The authors of Portfolios of the Poor found that a 'triple whammy' characterizes the financial lives of the poor. Incomes are not only low; they are also irregular and unpredictable... The authors' account suggests much that can be done to ease the financial conditions of poor people. -- Anirudh Krishna Science A refreshingly distinct path. Portfolios of the Poor ... avoid[s] the big picture and zoom[s] in on the basics of daily poverty, exploring how poor families manage their money... The diaries reveal a 'real, ongoing, and substantial demand' for better financial services, which poor families need to provide better health care and schooling for their children... Rather than waiting for the world to debate and accept their ideas, these authors have taken them up on their own. In the war against global poverty, that feels like one small battle won. -- Carlos Lozada Washington Post The research provides evidence of the sophistication with which poor people think about their finances. The Economist This is a very interesting book, which examines the quite sophisticated financial system developed by poor households to adjust their spending relative to their income. Choice A masterly assessment of the financial needs of people on very low incomes ... stuffed full of interesting and surprising insights, and should be read by anyone concerned with economic development and poverty reduction. I can't praise it highly enough. This is a model of the careful collection of evidence with important practical consequences. -- Diane Coyle The Enlightened Economist This book is a major contribution to the understanding of the situation of the poor in developing countries and should be a 'must reading' for both academics and policymakers concerned with ways of improving developmental policies. -- Werner Baer Enterprise and Society A good overview of how the world's poor intersect with financial institutions at the micro level. -- Tyler Cowen Marginal Revolution [A] fascinating and humanizing insight into the economic lives of the global poor, and a valuable resource for attempting to improve those lives. Ethics & International Affairs The book is written in a non-technical style accessible to the lay reader... [I]t makes a compelling case about the desperation of poverty, as well as the ingenuity of the people who live under conditions of poverty. -- Sajeda Amin Population and Development Review

Daryl Collins is senior associate at Bankable Frontier Associates in Boston. Jonathan Morduch is professor of public policy and economics at New York University and coauthor of "The Economics of Microfinance". Stuart Rutherford is the founder of SafeSave, a microfinance institution in Bangladesh. Orlanda Ruthven recently completed a doctoral degree in international development at the University of Oxford, and currently lives in Delhi.

List of Tables vii List of Figures ix Chapter One: The Portfolios of the Poor 1 Chapter Two: The Daily Grind 28 Chapter Three: Dealing with Risk 65 Chapter Four: Building Blocks: Creating Usefully Large Sums 95 Chapter Five: The Price of Money 132 Chapter Six: Rethinking Microfinance: The Grameen II Diaries 154 Chapter Seven: Better Portfolios 174 Appendix 1: The Story behind the Portfolios 185 Appendix 2: A Selection of Portfolios 211 Acknowledgments 243 Notes 247 Bibliography 265 Index 273