This paper explores the linkages between the financial behaviour of extreme poor Marma households and their resilience through a qualitative research approach. The study was conducted with Green Hill beneficiaries in Chittagong Hill Tracts (CHT). The main finding emerging from the study is that extreme poor Marma households significantly changed their financial behaviours (regarding savings and investing) as a result of their involvement with the Village Savings and Loan Association (VSL). Their savings increased which enabled them to cope with illness, crisis/lean period of their savings and invest in income generating activities for regular income but also to mitigate the impact of shock through lower adoption of risky strategies (such as borrowing from money lenders, reducing food consumption, distress asset/labour selling or providing extra labour). The intervention also had an effect on trade linkage with buyers and marketing of the products. This has important and positive effects on household resilience. Besides, the study finds that the intervention also affects extreme poor non-beneficiaries in three different ways. First, some benefitted from the presence of the groups in their villages (educational effect or trend effect), second because they were included by beneficiaries in VSL and third through reproducing informal VSL groups. VSL are comparatively more attractive for them than MFI loans, or moneylenders (flexibility and cost). The study concludes that VSL association approach is effective in helping the extreme poor households build their resilience in the CHT, where households have limited access to other financial services.
Chakma, N. The savings and investment behavior of extreme poor Marma community households in resilience building: a case study on Green Hill village savings and loan association intervention in the Chittagong Hill Tracts. Shiree Working Paper No. 19. Shiree, Dhaka, Bangladesh (2014) 33 pp.
The savings and investment behavior of extreme poor Marma community households in resilience building: a case study on Green Hill village savings and loan association intervention in the Chittagong Hill Tracts. Shiree Working Paper No. 19