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Fostering savings by commitment: Evidence from a quasi‐natural experiment at the Small Enterprise Foundation in South Africa

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  • Lucia, Dalla Pellegrina
  • Angela, De Michele
  • Giorgio, Di Maio
  • Paolo, Landoni

Abstract

We study the effects of a pilot project that strengthened the saving incentive mechanisms set up by the Small Enterprise Foundation (SEF), a leading microfinance institution based in South Africa. The program aimed at introducing a stimulus to save in the form of the possession of “Goal Card” whereby clients owning this tool were asked to identify a saving goal and to commit to a regular saving amount. The experiment had quasinatural approach, as it has been implemented by SEF in selected locations starting from May 2015. Difference in differences estimates show an improvement in the savings performance of the SEF customers treated with the program, compared to the counterfactual. Besides the evaluation of the program’s main effects, we investigate the clients’ understanding of the pilot and their attitude towards saving, as well as the quality of the pilot’s administration and its operational challenges, through the administration and analysis of surveys conducted on both the treated and control groups of clients.

Suggested Citation

  • Lucia, Dalla Pellegrina & Angela, De Michele & Giorgio, Di Maio & Paolo, Landoni, 2019. "Fostering savings by commitment: Evidence from a quasi‐natural experiment at the Small Enterprise Foundation in South Africa," Working Papers 411, University of Milano-Bicocca, Department of Economics, revised May 2019.
    • Handle: RePEc:mib:wpaper:411
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    More about this item

    Keywords

    Microfinance; quasi-natural experiment; savings.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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