Savings Volatility Analysis: CARD Bank

This case study describes the savings volatility analysis done at CARD Bank in the Philippines. It highlights the advantages of implementing a savings volatility analysis in areas such as liquidity management, product development, and costing.The savings volatility analysis was part of a larger savings mobilization project with Grameen Foundation to introduce a new type of savings product and expand CARDs market share. Though CARD has offered voluntary savings products since it was created in 1997, it had not achieved its desired outreach or portfolio volume. In 2009, it partnered with Grameen Foundation to enhance access to safe, flexible, and convenient deposit accounts for the poor.The study states that savings volatility analysis is an essential part of liquidity risk management, and of making more intelligent decisions about deposit products. The analysis helps MFIs accurately understand:

• Amount of internal reserves to hold for potential withdrawals;
• Amount of deposits that can be used to invest in the loan portfolio;
• Costs of providing different types of deposit products.