Offer free of charge savings account

Offer savings accounts to self-employed women free of charge to eliminate the entry costs of opening an account. Giving access to formal savings accounts can help insulate micro-entrepreneurs from economic shocks and allows them to borrow less.

Behavioral Tools: Incentive

Benchmarked Intervention

Experiment Overview

In Chile, researchers, in collaboration with a local MFI and bank, offered free liquid savings accounts to self-employed women to increase access to formal savings and reduce debt. 91% of participants were women.

Impact

Individuals who were randomly assigned to receive a free savings accounts not only reduced short-term debt by 20%, but also reduced consumption cutbacks when experiencing an economic shock, compared to the control group.

Source: Kast, F., and Pomeranz, D, “Saving More to Borrow Less: Experimental Evidence from Access to Formal Savings Accounts in Chile”. NBER Working Paper No. 20239, 2014.