Microsavings and Market Saturation: The Evolution of Diversity in Saving Products
This paper investigates the relation between savings behavior and development.
Savings behavior is crucial to building wealth and creating freedom of action for prolonged investments. Numerous studies stress the importance of facilitating savings. The study investigates the hypotheses that total savings in a country increase with the number of MFIs in the country and that high savings product saturation in a country results in stronger economic and social development. These hypotheses emerge from the understanding that the number of savings products on offer influences saving behavior. The paper:
- Proposes savings market saturation as a measure for microfinance initiatives that lead to economic social development;
- States that the main aim of poverty reduction is to tackle behavioral weaknesses and foster self-discipline;
- Posits that a larger variety of savings products and an improvement in market saturation of financial products support poverty alleviation.
The paper states that diversity in savings products leads to increased sustainability and outreach. It recommends the adaptation of savings products to fulfill individual needs and encourage savings behaviour.
