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

40 Pages Posted: 31 Jan 2009 Last revised: 2 Oct 2010

See all articles by Pascaline Dupas

Pascaline Dupas

University of California, Los Angeles (UCLA) - Department of Economics

Jonathan Robinson

University of California, Santa Cruz

Date Written: January 2009

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.

Suggested Citation

Dupas, Pascaline and Robinson, Jonathan, Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya (January 2009). NBER Working Paper No. w14693. Available at SSRN: https://ssrn.com/abstract=1335718

Pascaline Dupas (Contact Author)

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States

Jonathan Robinson

University of California, Santa Cruz ( email )

1156 High St
Santa Cruz, CA 95064
United States

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