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Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya

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  • Pascaline Dupas
  • Jonathan Robinson

Abstract

Does limited access to formal savings services impede business growth in poor countries? To shed light on this question, we randomized access to non-interest-bearing bank accounts among two types of self-employed individuals in rural Kenya: market vendors (who are mostly women) and men working as bicycle-taxi drivers. Despite large withdrawal fees, a substantial share of market women used the accounts, were able to save more, and increased their productive investment and private expenditures. We see no impact for bicycle-taxi drivers. These results imply significant barriers to savings and investment for market women in our study context. Further work is needed to understand what those barriers are, and to test whether the results generalize to other types of businesses or individuals.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14693.

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Date of creation: Jan 2009
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Publication status: published as Pascaline Dupas & Jonathan Robinson, 2013. "Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 163-92, January.
Handle: RePEc:nbr:nberwo:14693

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