Microsavings Programs: Assessing Demand and Impact – A Critical Review of the Literature

This paper argues that there exists a gap in microfinance literature on the demand for and impact of savings on clients, microenterprises, households, communities and financial institutions.

The paper reviews empirical literature focused on savings products and services for the poor and attempts to answer the following questions:

• What information exists about the demand for savings services among the poor?
• What studies exist that evaluate the impact of savings products and services on the poor?
• How have empirical studies addressed savings products relative to loan products?
• Which are the most appropriate indicators used to assess the impact of savings products?

The paper:

• Discusses two types of demand studies found in microsavings literature;
• Finds evidence of demand for additional savings services;
• Finds limited literature about both microfinance impact and microsavings, and few studies that provide social measurements to determine how savings affect the quality of life of clients;
• Discusses the most useful and relevant impact indicators for future evaluations.

It concludes that:

• Donors and researchers are realizing the importance of studies that quantify the demand for and impact of savings services;
• Based upon new and better studies that have become available in just the past several years, practitioners can design more appropriate savings products and begin to monitor their effectiveness on the lives of the poor.