Beyond Access: Why the Poor Undersave for Productive Investment

This paper investigates the persistent puzzle of why individuals in poverty chronically undersave for productive investments, despite utilizing informal savings mechanisms for social events and recognizing the high returns of investing. While traditional literature largely attributes this gap to limited institutional access, debt burdens, addictive goods, and an undervaluing of investment, these explanations remain incomplete. To address this, the paper builds a theoretical framework arguing that the inability to save for investment stems from a combination of limited social infrastructure, the psychological temptation to spend caused by material deprivation, and intense pressure for social conformity.The study further explores how these psychological and social constraints are heavily mediated by gender, demonstrating that the structural and emotional barriers to capital accumulation operate asymmetrically for men and women due to distinct household roles and social obligations. Finally, the paper outlines behaviorally-informed policy recommendations, such as targeted entrepreneurial training for youth and asymmetric "opt-in" private wallets, designed to bypass these social pressures and foster socio-financial progress across impoverished communities.