Savings capacity is defined as the possibility for individuals (or families) to set aside a percentage of their current income to reserve it for future use, especially for contingencies or for an investment project that will generate a return.
However, all this must be done without jeopardizing economic stability or lowering the quality of life. Is this the case for you?
The social and economic reality in the Dominican Republic places the provinces of the Southern region among the most unequal.
The Ministry of Economy, Planning and Development (MEPyD) and the National Statistics Office (ONE), in their report Monetary Poverty 2020, note an increase in this condition, going from 21.0% in 2019 to 23.4% at the close of last year. This implied, in absolute terms, that 268,515 Dominicans fell into general poverty.
What do the financial statistics say regarding the saving capacity of Dominicans? When comparing the data for the last two years (March 2020-March 2021), the positioning of the provinces with the best savings capacity has changed practically nothing. The inhabitants of the Southern region, according to data from the Superintendency of Banks (SB), are those with the lowest savings capacity.
In contrast, the provinces with the best savings capacity are distributed between the North and East regions, with a stop in the National District, whose average per capita savings level places it in first position with RD$831,971.2, that is, well above (4.2 times) the average of the best positioned, which is RD$195,887.2. According to the SB, seven of the 10 with the best position are in the Cibao.
The most updated information establishes that of the 10 provinces with the lowest savings capacity in the country, nine are in the Southern region. In the East is the other one, El Seibo, which occupies the sixth place in this table of positions.
Elías Piña province, which leads the table among the poorest in the country with more than 80% poverty, according to the MEPyD, registers a per capita savings of only RD$12,013.5. This amount is 16.3 times the average of the ten districts with the best savings capacity.
Monte Plata is in second place as the province with the lowest savings capacity, with RD$15,957.1, despite being an area with high agricultural and livestock production.
Independencia and Pedernales follow with RD$18,389.6 and RD$19,050, respectively, followed by Bahoruco with RD$19,147.3.
Despite Barahona being one of the provinces with the greatest tourism potential in the country, it appears among those with the lowest per capita savings capacity with RD$40,803. However, in this case it is the first to exceed the average of RD$28,096.1 of this selection. The others in the table reach RD$48,882.3 per capita, as is San José de Ocoa, only below San Juan (RD$51,297.5) and Peravia with RD$80,046.1.
As for the provinces with the best position in terms of average per capita savings, the average of RD$195,887.2 is seven times higher than the RD$28,096.1 of those with the best capacity to save.
After the capital, Santiago is in second place among the provinces with the highest savings capacity with RD$193,341.6, followed by La Altagracia with RD$164,851.2, followed by Duarte with RD$124,286.5. In this category enters Dajabón, which is the only one from the border among this table, with RD$98,883.7.
As far as interest rates are concerned, there is a detail that coincides between the capacity to save and the cost of money in the case of accessing financing. SB records state that the lower the savings capacity, the higher the interest rate paid.
What does the data say? Elías Piña, which has the worst average per capita savings rate, registers an interest rate of approximately 19.2% for loans, while in the capital, where the best average is, its interest rate is 12.2%, that is, a difference of seven percentage points.