A Review of Commitment Savings Products in Developing Countries

Many financial institutions in developing countries offer savings products, yet little has been done to assess the relative merits of different product designs. This paper seeks to addresss this gap by:

• Examining different designs that provide incentives to clients to commit to save;
• Analysing the results of a web-based survey of microfinance institutions in order to describe different commintment savings products in use around the world.

The paper finds that the main mechanisms may be divided into:

• Deposit-side mechanisms that help clients make regular deposits;
• Withdrawal-side mechanisms that help clients restrict the use of their funds except for well-planned uses or emergencies.