A Penny Saved: How Do Savings Accounts Help the Poor?

22 Pages Posted: 10 Jan 2012

See all articles by Jake Kendall

Jake Kendall

University of Washington, CSE

Date Written: November 1, 2010


Many studies have looked at the experiences of poor savers and there is plenty of anecdotal evidence that savings accounts have resulted in greater asset accumulation, better risk mitigation, and other benefits for poor households. But, to what extend does a hard look at the evidence support a claim that savings accounts actually improve welfare?

This paper reviews the experimental evidence (both RCTs and natural experiments) regarding the impact of improved access to savings. While there are precious few pieces of evidence documenting the development benefits of formal savings services for poor households, the few rigorous studies that exist show savings accounts enhance the ability to save up for productivity enhancing investments and weather unexpected bad times. They may even empower women to make financial decisions within the household.

Keywords: savings, poverty, development, financial inclusion, financial access

Suggested Citation

Kendall, Jake, A Penny Saved: How Do Savings Accounts Help the Poor? (November 1, 2010). Available at SSRN: https://ssrn.com/abstract=1982461 or http://dx.doi.org/10.2139/ssrn.1982461

Jake Kendall (Contact Author)

University of Washington, CSE ( email )

Seattle, WA 98195
United States

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