Assessing the Demand for Savings Services among Microfinance Clients in Afghanistan

This study analyzes the demand for savings services among microfinance clients in urban and peri-urban Kabul and Mazar-e-Sharif regions of Afghanistan. It examines the MFI client profile, the ability and willingness of clients to save formally and client perceptions about savings.

The research uses data from literature review, focus group discussions and structured interviews. Study findings include:

• Around 14 percent of MFI clients save formally and a majority would save given the opportunity;
• One-third of current clients could be regular savers;
• Most MFI clients have two or more sources of income;
• Saving is considered a good habit, and is interpreted as putting money aside for specific purposes;
• Banks are considered the safest place for savings, and MFIs, the primary resource for loans;
• Perception of not having enough money is the biggest impediment to savings.

The study has several implications for the design of savings products. It reveals that people value convenience more than safety, and therefore, a mobile banking scheme would be welcome. It also suggests that women are less informed about financial services and could greatly benefit from savings.