The Impact of Savings Accounts on Households in ChilePDF version
Expanding financial services to reach the poorest of the poor helps to broaden their savings and investment options. Yet the vast majority of people in the developing world remain unbanked.1 In the absence of formal savings products, many in the developing world depend on costly devices like "susus" - agents who charge a fee to collect money for secure keeping - or illiquid devices such as rotating savings and credit associations (ROSCAs) - groups that pool members’ regular contributions for lump-sum distribution. A majority of rural households store cash at home “under the mattress,” where it is prone to loss, theft, and the demands of neighbors and kin.
Although Chile boasts an upper-middle-income economy, such prosperity is not universally shared. In 2009, Region IX – the target region for this study – reported the highest incidence of poverty in the country at 27.1 percent, nearly double the national average.3 And although Chile has a vibrant financial sector, a pilot survey in the target region revealed that 33 percent of the population does not use a savings account.
Parallel studies are being simultaneously conducted in Uganda and Malawi. The aim is to understand the causes and consequences of the lack of access to banking services in a variety of contexts.
In order to evaluate the impact of access to a formal savings product, researchers have partnered with a commercial bank or credit union in each country. A probabilistic sampling strategy was then used to enroll a representative sample of unbanked households in the areas in which the partnering institution operated. After completing a baseline survey, study households were randomly assigned to either a treatment or comparison group. Those assigned to the treatment group received a voucher enabling them to open a free account with the local branch of the partner institution. They also received procedural assistance with account opening.
Follow-up surveys at 6-, 12- and 18-month will be used to estimate the impacts of the savings accounts on a range of household activities, including agricultural and business practices, expenditures, household income, response to shocks, and savings and credit practices. Qualitative data will be collected to understand the mechanisms through which access to a bank account affected (or not) the study participants.
Results forthcoming.
