Saving in Times of Poverty: Are We Asking the Poor to Save What They Do Not Have? (1–3)

Noaman Yousif Mohamed
At a time when incomes are being eroded, purchasing power is declining, and conventional solutions are failing to address Sudan’s cost-of-living crisis, how can we ask people to save when their incomes are insufficient to cover their families’ basic needs? How can we encourage an employee waiting for an overdue salary, a casual worker dependent on daily wages, or a tea seller struggling to feed her family to set aside part of an income that barely covers food, medicine and transport?
In Sudan today, this question is no longer simply a discussion about money management or promoting a culture of saving. It has become an economic and social issue closely linked to poverty, the erosion of incomes, declining purchasing power and the diminishing ability of households to cope with emergencies and secure their children’s future.
The war has forced large sections of the Sudanese population to lose their jobs, livelihoods and property, while others face rising living costs, irregular salaries and pensions, and a decline in the real value of their incomes. Under these circumstances, securing food, healthcare and education has become a daily struggle, while planning for the future has taken a back seat to the immediate priority of survival.
Nevertheless, conventional advice continues to recommend that households allocate a proportion of their income to savings, as though the problem were simply a lack of financial awareness rather than the absence of any surplus that could actually be saved.
This raises the more fundamental question: Are poor people unable to save because they do not understand its importance, or because economic circumstances have deprived them of the means to do so?
First: When Income Becomes a Means of Survival
From an economic perspective, saving is the portion of disposable income not spent on current consumption. A surplus after meeting basic needs is therefore the first prerequisite for accumulating savings.
However, when income falls below the cost of essential needs, or barely matches it, households have no real scope for saving. If they set aside any amount, they may be forced to reduce their food consumption, postpone medical treatment or borrow money to meet other expenses.
This creates a cruel paradox: households try to put money aside to prepare for the future, yet find themselves borrowing to meet present needs.
The problem is not necessarily poor management of available resources. It may simply be that those resources are insufficient. A household that spends its entire income on necessities needs stable employment opportunities, adequate earnings, affordable basic services, and social protection to cushion it against economic shocks before being expected to meet savings commitments beyond its means.
This does not diminish the importance of financial education; rather, it places it in its proper context. Financial literacy can help people manage the resources available to them more effectively, but it cannot create a surplus out of an inadequate income.
Second: Inflation – The Silent Enemy of Savings
The savings crisis does not end with low incomes; it also extends to the declining purchasing power of money. A household may manage to save a certain amount after months of austerity, only to discover that the same amount can no longer buy the same quantities of food, medicine and other essential goods.
An employee receiving the same salary does not necessarily enjoy the same standard of living, because the real value of a salary is determined by what it can buy, not by the figure printed on the payslip. The same applies to savings, whose ability to protect against emergencies may gradually diminish as prices continue to rise.
Savings should therefore not be assessed solely by the amount accumulated, but also by their purchasing power and their adequacy for the purpose for which they were set aside.
This does not mean that cash savings are worthless. Liquidity remains essential for dealing with emergencies. What is needed, however, is the development of safer, more flexible ways of preserving savings that take inflation and the risks of holding cash into account, while providing financial options suited to people on low incomes.
Third: The War Has Depleted Household Financial Security
Before the war, many households relied on salaries, small businesses, agriculture, trade and rental income to meet their needs and build up savings. The war has inflicted extensive damage on these sources of livelihood, forcing large numbers of citizens to flee their homes, lose their jobs and property, and shoulder additional costs relating to accommodation, transport, healthcare and rebuilding their lives.
The losses have not been confined to current income; they have also extended to previously accumulated savings. A family may have to spend money originally set aside for education on rent, use its medical savings to buy food, or sell a productive asset to meet urgent needs.
The danger is that depleting savings may force households to borrow on harsh terms, withdraw their children from school, or dispose of productive assets. In this way, what might initially have been a temporary crisis can turn into prolonged poverty that is difficult to escape.
Saving is therefore an important instrument of financial security, but it cannot, on its own, protect households against the consequences of war without broader economic and social policies.
Fourth: Why Is Conventional Advice Not Enough?
Common financial advice recommends preparing a household budget, reducing unnecessary expenditure and setting aside a proportion of income for savings. These are useful practices when households have genuine room to exercise control over their spending.
However, applying such advice universally without taking differences in economic circumstances into account can make it unrealistic. Indeed, it may even push some households into borrowing or sacrificing essential needs.
It is therefore important to distinguish between three different situations:
1. Households unable to meet their basic needs: These require direct social support, opportunities to increase their incomes and affordable essential services, not the imposition of savings commitments.
2. Households that can barely meet their basic needs: They can be helped to manage their resources more effectively and take advantage of small, irregular savings opportunities whenever circumstances permit.
3. Households with a limited surplus: These can gradually build emergency reserves for unexpected expenses, education and healthcare through safe and flexible financial instruments suited to their means.
This classification provides a basis for designing fairer and more effective programmes, rather than treating poor and low-income households as though they were a homogeneous group.
Fifth: Saving Is a Shared Responsibility
Saving is an individual and household practice, but it is directly influenced by income levels, price stability, regular salary payments, access to financial services, and confidence in banking institutions.
The state is responsible for adopting policies that promote economic stability, improve the environment for production and employment, curb inflation and expand social protection.
Banks, for their part, are responsible for providing safe and accessible savings instruments, with reasonable fees and simple procedures, while safeguarding customers’ money and developing digital services wherever the necessary infrastructure is available.
Microfinance institutions should not limit their role to providing loans. They should also support income-generating activities, promote financial literacy and design services suited to the fluctuating incomes of people working in the informal sector.
Co-operatives and community organisations can also contribute by organising savings and mutual-support initiatives and reaching households that find it difficult to access conventional banking services.
However, microfinance itself can become a burden if loans are granted without a realistic feasibility assessment or a proper evaluation of the borrower’s ability to repay. Financing must therefore be linked to productive activities and income improvement, with financial products designed around beneficiaries’ actual needs and capacities.
Sixth: From a Culture of Saving to an Economy That Makes Saving Possible
If we are to address Sudan’s savings crisis, we must move beyond simply raising awareness of the importance of putting money aside and tackle the economic conditions that make saving possible in the first place.
Financial literacy improves decision-making, but it cannot compensate for the absence of income. A bank account provides a way to keep money safe, but it cannot make up for the absence of a regular salary. Savings associations promote mutual support, but they cannot, on their own, protect people against inflation and the loss of livelihoods.
The most realistic approach rests on three complementary pillars:
Improving households’ ability to earn an income.
Providing safe and flexible instruments for preserving savings.
Establishing a social protection system that helps households cope with risks beyond their capacity to manage.
Moreover, the success of savings programmes should not be measured solely by the number of accounts opened or the volume of money collected. It should also be assessed by households’ ability to cope with emergencies without falling into crippling debt, keep their children in education, obtain medical treatment and sustain their income-generating activities.
Savings may be small, but they can make an enormous difference if they help a family overcome a crisis without having to sell its assets or deprive its children of essential needs.
Conclusion: Do Not Ask the Poor to Save What They Do Not Have
The issue of saving in Sudan deserves an approach that goes beyond conventional advice and moralising rhetoric, because it is closely linked to poverty, the erosion of incomes, declining purchasing power and the growing risks facing households.
Yes, saving should be encouraged, financial literacy promoted and households helped to manage their resources more effectively. But we must recognise the limits of what prudent spending can achieve when income is insufficient to cover basic necessities.
We must not ask poor people to save at the expense of their food, or hold them responsible for failing to prepare for the future when they cannot secure their present needs.
At the same time, we should not assume that saving is impossible for everyone on a low income. Some households can build small reserves when the right conditions are in place.
What is needed is a fairer economic narrative, more realistic policies and financial institutions that are more responsive to people’s needs.
The real question is not: Why do poor people fail to save? It is: How can we build an economy in which poor people can live with dignity, earn an adequate income, save whatever they can and cope with emergencies without losing what little financial security they have left?
From this question, we will proceed to the second article in this series: “From Small Sums to Financial Security: How Can Poor People Save in Sudan?” This will take us from diagnosing the crisis to exploring practical solutions that households, institutions and communities can implement under Sudan’s current circumstances.
“Having little money does not prevent saving, just as having plenty does not guarantee it. What matters is awareness and the will to save.”
Noaman Yousif Mohamed
Former Banker – Institutional Development Consultant

Shortlink: https://sudanhorizon.com/?p=20209