The limits of commitment: who benefits from illiquid savings products
This study examines the impacts of a commitment savings product designed to help clients taking repeated overdrafts break their debt cycles
Abstract
Working with a private bank in Ghana, this study examines the impacts of a commitment savings product designed to help clients taking repeated overdrafts break their debt cycles. Overall, the product significantly increased savings with the bank without increasing overdrafts. However, after accounting for other sources of savings, the study finds that clients with above-median baseline overdraft histories do not accrue new savings during the commitment period. Rather, they draw down other savings to offset the committed amount and take on new debt. In contrast, individuals with below-median overdraft histories significantly increase savings during and after the commitment period.
This work is part of the Closing the Gender Gap in Africa: evaluating new policies and programmes for women’s economic empowerment programme
Citation
Buehren, Niklas; Goldstein, Markus P.; Klapper, Leora; Koroknay-Palicz, Tricia; Schaner, Simone Gabrielle. 2018. The Limits of Commitment: Who Benefits from Illiquid Savings Products? (English). Policy Research working paper;no. WPS 8633;Paper is funded by the Knowledge for Change Program (KCP);Impact Evaluation series Washington, D.C. : World Bank Group
Link
The limits of commitment: who benefits from illiquid savings products