Enabling Micro-Savings Through Mobile Banking in Sri Lanka

Last registered on October 19, 2016

Pre-Trial

Trial Information

General Information

Title
Enabling Micro-Savings Through Mobile Banking in Sri Lanka
RCT ID
AEARCTR-0001580
Initial registration date
September 28, 2016
Last updated
October 19, 2016, 2:49 AM EDT

Locations

Region

Primary Investigator

Affiliation
IRPS/UCSD

Other Primary Investigator(s)

PI Affiliation
Department of Economics, University of Warwick
PI Affiliation
Department of Economics, University of Peradeniya

Additional Trial Information

Status
Completed
Start date
2010-08-01
End date
2011-11-01
Secondary IDs
Abstract
We report on a field experiment using several methods for collecting deposits made in formal bank accounts in rural areas in Sri Lanka. We find that only frequent, face-to-face collection increases aggregate household savings. Collection involving community lock boxes increases balances at the collecting bank, but not overall household savings. Only community box collection appears to have the possibility of being financially viable. The various collection methods allow us to unbundle the role of frequency, salience and habit formation in deposit decisions. We find that frequency and salience affect the number of transactions, but not the level of savings.

An additional analysis of the data by Callen, De Mel, McIntosh, and Woodruff (2014) examines the how the change in financial services affects an individual’s optimal allocation of time between leisure and labor, and then between wage work and self-employment. In this context, the headwaters of formal savings are to be found in sacrificed leisure time: households work more, and work more on the wage market when savings options improve. These results suggest that the labor allocation channel is an important mechanism linking savings opportunities to income.

Registration Citation

Citation
McIntosh, Craig, Suresh de Mel and Christopher Woodruff. 2016. "Enabling Micro-Savings Through Mobile Banking in Sri Lanka." AEA RCT Registry. October 19. https://doi.org/10.1257/rct.1580-2.0
Former Citation
McIntosh, Craig et al. 2016. "Enabling Micro-Savings Through Mobile Banking in Sri Lanka." AEA RCT Registry. October 19. https://www.socialscienceregistry.org/trials/1580/history/11337
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
In months 1-6, deposit collectors from the National Savings Bank visited treated homes for 12 months in semi-rural areas of Sri Lanka ("weekly home treatment"). Deposit collectors used a mobile POS device links the agent to the bank's computer system via the mobile telecom network, allowing the depositor to receive a receipt with full account information. Deposit collectors did not visit control homes.

In months 7-12, treatment status remained constant or was reassigned to two alternative treatments: (1) biweekly home visits, or (2) weekly box pickup. For weekly box pickup, the bank installed a neighborhood savings
lockbox to replace the door-to-door deposit collector. Only the bank agent has the key to this box, and POS receipts are left behind once the box has been collected on its regular schedule.

In all, this yields six treatment intervention combinations:

1) Weekly Home Treatment
2) Weekly Home Treatment to Biweekly Home (the experiment in decreasing frequency)
3) Weekly Home Treatment to Weekly Box (the experiment in decreasing salience)
4) Control to Weekly Box
5) Control to Biweekly Box
6) Pure Control

Additionally, households were either assigned to weekly or monthly surveys.
Intervention Start Date
2010-12-01
Intervention End Date
2011-11-01

Primary Outcomes

Primary Outcomes (end points)
Savings per month, Transactions per month, Deposits per month, Withdrawals per month, Income earned, Hours worked, Employment (Self/Wage), Time allocation (Labor/Leisure), Expenditures, Consumption
Primary Outcomes (explanation)
Savings per month: total savings per month, disaggregated by total bank savings per month and total non-bank savings per month.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
156 distinct clusters of houses in remote areas not previously served by POS programs were identified. A listing exercise was conducted to gather data on employment and use of banking services for 3,657 households in the 156 clusters. Inclusion criteria for households were: (1) no member had any transaction with a bank in the previous month, and (2) a primary income earner received income with a frequency of at least once per week. 795 individuals were identified. For the first 6 months, 78 randomly assigned clusters received weekly home treatment (N=389), and 78 clusters were in the control group (N=406). For the last 6 months, the 78 treatment clusters were reassigned as follows: 40 remained in weekly home treatment (N=197), 19 switched to biweekly home treatment (N=85), and 19 switched to weekly box pickup (N=107). The 78 control clusters were reassigned as follows: 52 clusters remained as pure control (N=256), 13 switched to weekly box pickup (N=89), and 13 switched to biweekly box pickup (N=61).

In order to measure the effect of more frequent surveys on behavior, individuals were either surveyed monthly (18 rounds) or quarterly (8 rounds). The survey consisted of a detailed expenditure and cash flow survey to identify changes in both formal and informal savings behavior. 498 individuals were surveyed monthly and 297 were surveyed quarterly.
Experimental Design Details
Randomization Method
Randomization done in office by a computer.
Randomization Unit
156 clusters of houses, referred to as 'zones', were the unit of randomization for the study.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
156 Clusters of Houses
Sample size: planned number of observations
795 individuals
Sample size (or number of clusters) by treatment arms
40 clusters weekly home treatment, 19 clusters weekly home treatment to biweekly home treatment, 19 clusters weekly home treatment to weekly box pickup, 52 clusters pure control, 13 control to weekly box pickup, and 13 control to biweekly box pickup.

Survey Frequency: 389 individuals surveyed monthly, 406 individuals surveyed quarterly.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
November 01, 2011, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
November 01, 2011, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
156 clusters of houses
Was attrition correlated with treatment status?
Yes
Final Sample Size: Total Number of Observations
781 individuals
Final Sample Size (or Number of Clusters) by Treatment Arms
40 clusters weekly home treatment (N=197), 19 clusters weekly home treatment to biweekly home treatment (N=85), 19 clusters weekly home treatment to weekly box pickup (N=107), 52 clusters pure control (N=256), 13 control to weekly box pickup (N=89), and 13 control to biweekly box pickup (N=61).
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
When households increase their deposits in formal bank savings accounts, what is the source of the money? We combine high-frequency surveys with an experiment in which a Sri Lankan bank used mobile Point-of-Service (POS) terminals to collect deposits directly from households each week. In this context, the headwaters of formal savings are to be found in sacrificed leisure time: households work more, and work more on the wage market when savings options improve. These results suggest that the labor allocation channel is an important mechanism linking savings opportunities to income.
Citation
Callen, Michael, Suresh De Mel, Craig McIntosh, and Christopher Woodruff. 2014. “What are the headwaters of formal savings? Experimental evidence from Sri Lanka.” National Bureau of Economic Research, Working Paper Series, 20736.
Abstract
We report on a field experiment using several methods for collecting deposits made in formal bank accounts in rural areas in Sri Lanka. We find that only frequent, face-to-face collection increases aggregate household savings. Collection involving community lock boxes increases balances at the collecting bank, but not overall household savings. Only community box collection appears to have the possibility of being financially viable. The various collection methods allow us to unbundle the role of frequency, salience and habit formation in deposit decisions. We find that frequency and salience affect the number of transactions, but not the level of savings.
Citation
de Mel, Suresh, Craig McIntosh, and Christopher Woodruff. 2013. "Deposit Collecting: Unbundling the Role of Frequency, Salience, and Habit Formation in Generating Savings." American Economic Review, 103(3): 387-92.

Reports & Other Materials