iSAVE

Increasing Savings for Vulnerable Women’s Empowerment 

Western Kenya

Collaborators: Erick Gong and Felipe Dizon 

2013-2015. American Economic Association RCT Registry # AEARCTR-0000323.

In lower-middle income countries like Kenya, the gender gap in holding formal savings is a shocking 33%. Evidence from Kenya and across Africa suggests that women's inability to smooth consumption during income shocks can increase harmful shock-coping behaviors, including transactional sex. Increasing women's access to and knowledge of appropriate savings products has the potential to offset the harmful impacts and externalities of some shock-coping behaviors. 

We enrolled 600+ vulnerable women in an randomized-controlled trial to test the ability of personal precautionary savings to change shock-coping behaviors. Half of the women were self-identified commercial sex workers in Kisumu, the other half were widows and other single women with dependents in a nearby rural area. All of the women received training on savings, and participated in weekly interviews for three months. Half of each sample was randomly assigned to additionally receive a new mobile money account earmarked for personal savings, and weekly text message reminders. 

We find significant increases in savings balances among the treated group. We examine how these exogenously-induced changes in savings impact participation in informal risk-sharing arrangements and shock-coping behaviors.