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Banking the poor via savings accounts: Evidence from a field experiment

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  • Prina, Silvia

Abstract

In a setting with low penetration of bank accounts, I randomly gave access to bank accounts with zero fees at local bank-branches to a large sample of female household heads in Nepal. The zero fees and physical proximity of the bank led to high take-up and usage rates compared to similar studies in other settings. However, impact on income, aggregate expenditures, and assets are too imprecisely estimated to draw a conclusion. I do find reallocation of expenditures across categories (e.g. more spending on education and meat and fish, and less on health and dowries), and higher ability to cope with shocks. On qualitative outcomes, I find households report that their overall financial situation has improved. The lack of a clear story on mechanisms, yet strong result on aggregate self-perception of financial wellbeing, is consistent with access to quality savings accounts leading to household improvements via multiple mechanisms.

Suggested Citation

  • Prina, Silvia, 2015. "Banking the poor via savings accounts: Evidence from a field experiment," Journal of Development Economics, Elsevier, vol. 115(C), pages 16-31.
  • Handle: RePEc:eee:deveco:v:115:y:2015:i:c:p:16-31
    DOI: 10.1016/j.jdeveco.2015.01.004
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Simone Schaner, 2016. "The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor," NBER Working Papers 22534, National Bureau of Economic Research, Inc.
    2. Dupas, Pascaline & Karlan, Dean S. & Robinson, Jonathan & Ubfal, Diego, 2016. "Banking the Unbanked? Evidence from three countries," CEPR Discussion Papers 11420, C.E.P.R. Discussion Papers.
    3. Klühs, Theres & Grohmann, Antonia & Menkhoff, Lukas, 2017. "Does Financial Literacy Improve Financial Inclusion? Cross Country Evidence," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168165, Verein für Socialpolitik / German Economic Association.
    4. Grohmann, Antonia & Klühs, Theres & Menkhoff, Lukas, 2018. "Does Financial Literacy Improve Financial Inclusion? Cross Country Evidence," Rationality and Competition Discussion Paper Series 95, CRC TRR 190 Rationality and Competition.
    5. Vincent Somville & Lore Vandewalle, 2017. "Access to Formal Banking and Household Finances: Experimental Evidence from India," CMI Working Papers 1, CMI (Chr. Michelsen Institute), Bergen, Norway.
    6. Pierre Bachas & Paul Gertler & Sean Higgins & Enrique Seira, 2017. "How Debit Cards Enable the Poor to Save More," NBER Working Papers 23252, National Bureau of Economic Research, Inc.
    7. Berry, James & Karlan, Dean & Pradhan, Menno, 2018. "The Impact of Financial Education for Youth in Ghana," World Development, Elsevier, vol. 102(C), pages 71-89.
    8. Carvalho, Leandro S. & Prina, Silvia & Sydnor, Justin, 2016. "The effect of saving on risk attitudes and intertemporal choices," Journal of Development Economics, Elsevier, vol. 120(C), pages 41-52.
    9. ABEBE, Girum & TEKLE, Biruk & MANO, Yukichi, 2015. "Changing saving and investment behavior: the impact of financial literacy training and reminders on micro-businesses," Discussion paper series HIAS-E-15, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    10. Sonia Di Giannatale & María José Roa, 2016. "Formal Saving in Developing Economies: Barriers, Interventions, and Effects," IDB Publications (Working Papers) 8107, Inter-American Development Bank.
    11. Catalina Granda & Franz Hamann & Cesar E. Tamayo, 2017. "Credit and Saving Constraints in General Equilibrium: Evidence from Survey Data," Borradores de Economia 1002, Banco de la Republica de Colombia.
    12. Sonia Di Giannatale & María José Roa, 2016. "Formal Saving in Developing Economies: Barriers, Interventions, and Effects," IDB Publications (Working Papers) 97397, Inter-American Development Bank.
    13. Carolina Laureti & Alain De Janvry & Elisabeth Sadoulet, 2017. "Flexible Microfinance Products for Financial Management by the Poor: Evidence from SafeSave," Working Papers CEB 17-036, ULB -- Universite Libre de Bruxelles.
    14. Teresa Molina Millan & Karen Macours, 2017. "Attrition in randomized control trials: Using tracking information to correct bias," NOVAFRICA Working Paper Series wp1702, Universidade Nova de Lisboa, Faculdade de Economia, NOVAFRICA.
    15. Eduardo A. Cavallo & Tomás Serebrisky & Verónica Frisancho & Jonathan Karver & Andrew Powell & Diego Margot & Ancor Suárez-Alemán & Eduardo Fernández-Arias & Matías Marzani & Solange Berstein & Marian, 2016. "Saving for Development: How Latin America and the Caribbean Can Save More and Better," IDB Publications (Books), Inter-American Development Bank, number 94597 edited by Eduardo A. Cavallo & Tomás Serebrisky, February.
    16. Lasse Brune & Xavier Giné & Jessica Goldberg & Dean Yang, 2016. "Facilitating Savings for Agriculture: Field Experimental Evidence from Malawi," Economic Development and Cultural Change, University of Chicago Press, vol. 64(2), pages 187-220.
    17. Carolina Laureti, 2017. "Why do Poor People Co-hold Debt and Liquid Savings?," Working Papers CEB 17-007, ULB -- Universite Libre de Bruxelles.
    18. repec:bla:devpol:v:35:y:2017:i:1:p:23-38 is not listed on IDEAS
    19. repec:eee:jeborg:v:142:y:2017:i:c:p:425-450 is not listed on IDEAS
    20. Marc Labie & Carolina Laureti & Ariane Szafarz, 2016. "Discipline and Flexibility: A Behavioral Perspective on Product Design in Microfinance," Working Papers CEB 15-020, ULB -- Universite Libre de Bruxelles.
    21. repec:spr:qualqt:v:51:y:2017:i:4:d:10.1007_s11135-016-0342-1 is not listed on IDEAS
    22. repec:eee:deveco:v:130:y:2018:i:c:p:145-159 is not listed on IDEAS
    23. repec:wbk:wbpubs:29510 is not listed on IDEAS
    24. repec:eee:wdevel:v:104:y:2018:i:c:p:238-256 is not listed on IDEAS
    25. repec:idb:idbbks:7677 is not listed on IDEAS

    More about this item

    Keywords

    Savings accounts; Financial access; Transaction costs;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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