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Trust and Saving in Financial Institutions by the Poor

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  • Sebastian Galiani
  • Paul Gertler
  • Camila Navajas Ahumada

Abstract

We randomly assigned beneficiaries of a conditional cash transfer program in Peru to attend a 3 hour training session designed to build their trust in financial institutions. We find that the intervention: (a) increased trust in banks, but had no effect on financial literacy, and (b) increased savings over a ten month period. The increase in savings represents a 1.4 percentage point increase in the savings rate out of the cash transfer deposits, and a 0.4 percentage point increase in the savings rate out of household income.

Suggested Citation

  • Sebastian Galiani & Paul Gertler & Camila Navajas Ahumada, 2020. "Trust and Saving in Financial Institutions by the Poor," NBER Working Papers 26809, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26809
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    Cited by:

    1. Seth Garz & Xavier Gine & Dean Karlan & Rafe Mazer & Caitlin Sanford & Jonathan Zinman, 2021. "Consumer Protection for Financial Inclusion in Low- and Middle-Income Countries: Bridging Regulator and Academic Perspectives," Annual Review of Financial Economics, Annual Reviews, vol. 13(1), pages 219-246, November.
    2. López, Fernando & Rosas, Guillermo, 2022. "COVID-19 and attitudes towards early withdrawal of pension funds: The role of trust and political ideology," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    3. Jalan, Akanksha & Matkovskyy, Roman & Urquhart, Andrew & Yarovaya, Larisa, 2023. "The role of interpersonal trust in cryptocurrency adoption," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    4. Karlan, Dean & Horn, Samantha & Jamison, Julian C. & Zinman, Jonathan, 2020. "Does lasting behavior change require knowledge change? Evidence from savings interventions for young adults," CEPR Discussion Papers 15392, C.E.P.R. Discussion Papers.
    5. Ghosh, Saibal, 2021. "How important is trust in driving financial inclusion?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    6. Munacinga Simatele & Loyiso Maciko, 2022. "Financial Inclusion in Rural South Africa: A Qualitative Approach," JRFM, MDPI, vol. 15(9), pages 1-22, August.

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    More about this item

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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