We hear a lot about the promise of microcredit, small loans to help low income people start businesses and improve their lives. The concept has caught fire among philanthropists who see it not as a handout but as a way to help people help themselves.

In the Seattle area, nearly two dozen non-profits are dedicated to microfinance -- loans and other financial services for the poor.

PHIL COALE/ASSOCIATED PRESS

Americans who bought homes through the IDA program have been very good at keeping them.

In talking with Bob Christen of the Gates Foundation for my story today, he told me the reality of microcredit hasn't lived up to its promise to lift poor people out of poverty, despite the $2 billion a year being spent on it. He made a strong case that the picture is more complex than just loans, and savings should be a much bigger part of the solution. Savings helps individuals, enterprises and economies get through uncertain times.

The same thing may apply in the United States, where savings is finally making a comeback. Americans' savings rate dropped to negative territory in 2005, but has since reversed that trend, rising to almost 7 percent in May and averaging about 5 percent so far this year.

New research shows that low-income Americans who participated in matched savings programs weathered the recession relatively well. Almost all of them held on to their homes, said Andrea Levere, president of the Corporation for Economic Development (CFED). She presented the findings this week at an annual conference of Philanthropy Northwest.

Last year, CFED surveyed about 750 low-income home owners who had received an Individual Development Account sometime over the past five years. An IDA, similar to a 401K match, is a grant that matches the monthly savings of working-poor families trying to buy their first home, pay for education or start a business.

Only one of the homeowners had foreclosed. CFED repeated the study using courthouse records of properties and found a foreclosure rate of less than 2 percent.

"This is wealth creation done right," Levere said. Participants saved money for a down payment, received intensive financial education and fixed rate long-term mortgages, all requirements of the IDA program.

JIM SIMON

People who once lived in a Kenyan slum are able to purchase their own homes built by the microfinance organization Jamii Bora.

Housing is also at the center of an innovative but risky program in Kenya started by the non-profit microfinance group Jamii Bora Trust, which Jim Simon wrote about here. The women involved said loans alone aren't going to get people out of poverty. Jamii Bora provides street beggars and others small loans to start businesses, but only if they first save half the amount themselves.

In the U.S., about 83,000 people have received individual development accounts, Levere said. Banks had an incentive to participate because they could sign loans with families buying homes through the program.

Washington state has become a hotbed for similar "asset building activities," she said. The Asset Building Coalition got off the ground in late 2006 and promotes financial literacy, saving and access to mainstream banking, in addition to the Earned Income Tax Credit and other benefits.

While poverty is traditionally measured by income, Levere prefers to measure assets -- the net worth of a household that helps it withstand crises.

The question is whether or not a household could exist at the poverty level for three months if its main source of income went away. Under that definition, almost a quarter of Americans fall under the poverty line, she said.

Considering the high cost of education coupled with the recession, this may be the first generation that is less educated than the one before, Levere said.

Since people need more support to save for education, entrepreneurship and home ownership, she thinks it's a good idea if "every child born in America started with an account."