Fostering Savings by Commitment: Evidence from a Quasi-Natural Experiment at the Small Enterprise Foundation in South Africa

51 Pages Posted: 31 May 2019

See all articles by Lucia Dalla Pellegrina

Lucia Dalla Pellegrina

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Angela De Michele

The Small Enterprise Foundation

Giorgio Di Maio

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Paolo Landoni

Polytechnic University of Turin - Department of Management and Production Engineering (DIGEP)

Date Written: May 31, 2019

Abstract

We study the effects of a pilot project that strengthened the saving incentive mechanisms set up by the Small Enterprise Foundation (SEF), a leading microfinance institution based in South Africa. The program aimed at introducing a stimulus to save in the form of the possession of “Goal Card” whereby clients owning this tool were asked to identify a saving goal and to commit to a regular saving amount. The experiment had quasi-natural approach, as it has been implemented by SEF in selected locations starting from May 2015. Difference in differences estimates show an improvement in the savings performance of the SEF customers treated with the program, compared to the counterfactual. Besides the evaluation of the program’s main effects, we investigate the clients’ understanding of the pilot and their attitude towards saving, as well as the quality of the pilot’s administration and its operational challenges, through the administration and analysis of surveys conducted on both the treated and control groups of clients.

Keywords: microfinance; quasi-natural experiment; savings

JEL Classification: G21, I25, L31, O15

Suggested Citation

Dalla Pellegrina, Lucia and De Michele, Angela and Di Maio, Giorgio and Landoni, Paolo, Fostering Savings by Commitment: Evidence from a Quasi-Natural Experiment at the Small Enterprise Foundation in South Africa (May 31, 2019). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 411, May 2019. Available at SSRN: https://ssrn.com/abstract=3396878 or http://dx.doi.org/10.2139/ssrn.3396878

Lucia Dalla Pellegrina (Contact Author)

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Angela De Michele

The Small Enterprise Foundation ( email )

Tzaneen
South Africa

Giorgio Di Maio

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Paolo Landoni

Polytechnic University of Turin - Department of Management and Production Engineering (DIGEP) ( email )

Corso Duca degli Abruzzi, 24
Torino, Torino 10129
Italy

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