Use goal setting and commitment devices to increase saving

Offer existing clients an one-on-one financial counseling sessions in which bank staff would help clients open a savings account, set a realistic savings goal, and commit to making monthly deposits. To reinforce the clients’ commitment to save, the bank could offer them a savings kit which includes a savings card with their name, account number, and a sticker representing their chosen savings goal, and a small pouch to set aside money for their monthly deposits. To further motivate regular savings, the savings card could be stamped every time a deposit is made. Clients who complete a number of deposits could be offered a small prize.

Behavioral Tools: Commitment, Goal Setting

Benchmarked Intervention

Experiment Overview

Small business owners with a microfinance loan in Mexico were offered a new savings product that enabled them to set a savings goal using a a goal-setting exercise where they prompted clients to think about expenses for which they needed to save. Clients were also offered a savings card with their name, account number, a sticker representing their chosen savings goal, and a space for their signature next to the deposit amount in order to create a sense of commitment. The kit also included a savings pouch to help clients set aside small amounts for their next deposit. Clients who completed six deposits were offered a small prize. Finally, to remind clients of the savings product, they received text message reminders with their goal, the amount they committed to deposit, and feedback on their progress toward their savings commitment.

Impact

Average savings balances among clients who received the intervention increased by 8 times over a period of three months.

Source: Ideas 42. (2019). Savings for Small Business Owners Through Goal Setting: Prompting Mexican microloan holders to open and use formal savings accounts. Retrieved from https://www.ideas42.org/wp-content/uploads/2019/06/I42-603_CAME_ProjectBrief_2.pdf