banking the poor via savings strongaccountsstrong evidence from a field.pdf

BANKING THE POOR VIA SAVINGS ACCOUNTS: EVIDENCE FROM A FIELD EXPERIMENT∗ Silvia Prina† January 28, 2013 Abstract The majority of the poor lack access to bank accounts and have to use costly informal savings mechanisms. Using a field experiment, I randomly gave access to simple bank accounts with no fees at local bank branches to a large sample of female household heads in Nepal. Results show that there is untapped demand for savings accounts and that the poor do save. Access to the savings accounts increased monetary assets and total assets without crowding out other kinds of assets or savings institutions. Finally, financial access strongly increased households’ investments in health and education. JEL Codes: D14, O16, G21 Keywords: savings accounts, asset accumulation, investment in health and education ∗I am grateful to Santosh Anagol, Manuela Angelucci, Carlos Chiapa, David Clingingsmith, Pascaline Dupas, Xavi Gin´e, Jessica Goldberg, Sue Helper, Cynthia Kinnan, Nicola Lacetera, David Lam, Dilip Mookherjee, Michael Porter, Jon Robinson, Heather Royer, Scott Shane, Justin Sydnor, Mark Votruba, Dean Yang, and numerous conference participants and seminar participants at the 2011 and 2012 AEA Meetings, PacDev, MIEDC, NEUDC, Case Western Reserve University, CeRMi, ITAM, UC-Davis,UC-Santa Cruz and University of Michigan for helpful comments and discussions. I am grateful to GONESA for collaborating with me on this project, and Zach Kloos and Adam Parker for outstanding research assistance. I thank IPA-Yale University Microsavings and Payments Innovation Initiative and the Weatherhead School of Management for funding. All errors are my o