Portfolios of the Poor – How the World’s Poor Live on $2 a Day

Portfolios of the Poor: How the World’s Poor Live on $2 a Day (2009) challenges common assumptions about poverty and financial behavior. Through detailed year-long financial diaries of families in Bangladesh, India, and South Africa, the authors reveal a surprising truth: the poor are not financially passive—they are active money managers constantly juggling complex financial tools.

Written by Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven, the book uncovers how low-income households use savings groups, microloans, informal lending, and creative budgeting strategies to manage unstable incomes and unexpected expenses.

Rather than focusing solely on income levels, the authors examine financial flows—showing how access to reliable financial services can significantly improve stability and opportunity. The result is a deeply human, data-driven narrative that reshapes how policymakers, economists, and development practitioners understand poverty.

Inside, readers will discover:

• How families survive on extremely low incomes

• The hidden financial systems within poor communities

• The role of microfinance and informal savings

• Why access to financial tools matters more than income alone

• Practical insights for poverty alleviation strategies

Portfolios of the Poor is essential reading for anyone interested in economics, global development, social entrepreneurship, and financial inclusion.