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Innovations for Poverty Action (2014)

High Hopes - Saving for High School with a Mobile-Money Lock-Box (Kenya)

High School Mobile-Money Kenya

Innovations for Poverty Action

Titre : High Hopes - Saving for High School with a Mobile-Money Lock-Box (Kenya)

Région /Pays : Kenya

Date : 2014-2015

In many countries in sub-Saharan Africa, the transition from primary school to high school is costly for students and their parents even when tuition costs are low. In Kenya, researchers partnered with a telecom operator to evaluate the impact of a commitment savings account, called the “High Hopes” Lock-Savings Account, on account usage, savings and loans, and school enrollment. The study found that many parents used the accounts––usage rates increased by about 25 percentage points––and that among those who took up the account, total financial savings increased by three to four times. Parents who saved were also 18-24 percentage points more likely to enroll their children in high school. However, the results were nearly the same for a more conventional mobile savings account that did not offer the commitment bonus, suggesting that easy access to a means of saving, even absent behavioral incentives, was enough to affect parents’ decisions.

. Saving for long-term goals can be difficult. Many people have a tendency to focus their attention and income on immediate demands and temptations while postponing, or simply forgetting, long-term savings goals. This problem may be especially acute for low-income individuals in developing countries, who often lack access to easy-to-use and low-cost banking services. However, recent evidence suggests commitment savings accounts can be designed with product features that help the poor commit to their savings plans and overcome these barriers. This project builds on this body of evidence and tested whether a commitment savings account could also help clients meet savings goals when offered via a mobile money platform. The study evaluated if long-term savings could be encouraged by including both a waiting period for early withdrawals and an interest rate bonus on funds saved until the goal date.

Taille de l’échantillon  : 4,000 parents of children in the last year of primary school

Innovation for Poverty Action (IPA)

Page publiée le 9 septembre 2023