Impact Evaluation of savings product in combination with flexible repayment schedules in microfinance

Principal Researcher: John Papp, Ph. D candidate (Princeton), Professors Erica Fields and Rohini Pande (Harvard)
Partner Organization: Kshetriya Gramin Financial Services (KGFS), Tamil Nadu

Kshetriya Gramin Financial Services (KGFS), a relatively new financial service company, is launching an innovative savings product among clients in its Thanjavur branches.  As legislation prevents most microfinance institutions working in underserved rural areas to provide savings, KGFS’s product is a promising idea.  The research project will be integrated into the roll-out of KGFS' unique savings product. Through randomisation, the research team will provide an "encouragement design," where we provide an incentive to treatment groups to take up the savings, as compared to a control group who does not receive such an encouragment design. Through results we will be able to measure the difference between those groups who were encouraged to take up the savings and those who were not.  Baseline, midline, and endline surveys will be used to measure whether the encouragement deisgn has had any impact on takeup. This project also aims a) To determine the extent to which a savings product attracts clients that would not have otherwise taken loans; b) To examine whether savings provide a substitute for loans; c) To determine whether moving from a weekly to a monthly repayment schedule affects loan repayment; and d) To observe whether there are differences between people who switch from loans to savings than those who remain with loans in income level, repayment rates, etc. 

CMF Research Associate: Ceren Baysan

Related Resources:

Project Blog (Updated by Ceren Baysan)