Roughly 7 months ago, I wrote a blogpost titled “The impact of community currencies in low-income communities”, in which, as the title suggests, I covered the real-world impact these paper-based, and crypto-based, community currencies have on low-income communities (I would recommend you read it if you haven’t).

For those who know my history, low-income communities hold a special place in my heart, having dedicated a better half of a decade working among such communities.

Another idea I have been masticating is of savings or no-loss lotteries to benefit these marginalised communities.

Lotteries are big business worldwide. What may come as a surprise to many is the target-market for said lotteries - the poor and low-income groups. Americans spend billions of dollars per annum on lotteries. But I don’t live in the United States (not yet??), so I will cover stats of an area I know best.

The following were reported by our National Lottery Board in 2011.

In South Africa:

• poorer people play the lottery more regularly than those with higher incomes

• 73% of lottery players earn less than R5000 (~ $341 in todays exchange rate) a month

• of those, 33% earn R1,000 (~ $68 in todays exchange rate) a month or less

• 71% sacrificed household necessities to play the lottery

These are shocking, yet somewhat expected, statistics.

I wanted to contrast the above stats with those of savings rate among the poor and low-income earners, - but with some making R1000 (~ $68) a month to live off, there is literally nothing to save!

<insert broken-heart emoji >

These stats are further compounded with South Africa’s 28.48% unemployment rate. But, this post is not about these depressing stats. Besides these, one other characteristic of lotteries is that players loose their money. There is a 1 in 13,983,816 chance of winning (in South Africa, at least).

There is a new (or old?) concept of a savings lottery/ lottery savings scheme/ no-loss lotteries. The idea is you save money, and those savings enable you to stand a chance of winning - it’s like playing the lottery except you don’t loose your money after playing. And when/if you win, you get the winnings plus all your savings are still there.

Such initiatives are great and encourage a savings culture among low-income earners. Unsure how well the uptake will be, but judging by how much is spent on lotteries, maybe with ample education and marketing these initiatives could pick up? Granted, perhaps the winnings won’t be as high as traditional lotteries and make you an instant millionaire - but we gotta start somewhere, right?

There are various explorations of this idea worldwide - transform low-income earners from the habit of gambling (lottery) to a form of saving.

There is even a blockchain-based no-loss lottery savings scheme - PoolTogether - which I personally love and use :-) . Anyone with an Ethereum wallet can save, in crypto or stable-coins/crypto-dollars, and stand a chance to win a few thousand dollars weekly. Your deposited crypto or stable-coins/crypto-dollars remain available to you at any point.

I don’t know if there are any such initiatives in South Africa (reach out if you know of any!), but this initiative would be one of many much needed services for low-income earners in the country. Maybe there is some research work on this that I’m not aware of (again, do reach out if there is).

Anyway, there are a few other thoughts/ideas I have been thinking about. I will put them “on paper” once I have digested them.