Door-to-Door Deposits as a Commitment to Savings? Evidence from a Field Experiment in the Philippines

This paper uses a randomized control trial to evaluate the impact of offering a deposit-collection service to the micro-savers of a rural bank in the Philippines. The paper details the following for the deposit collecting program:

• Clients demand deposit collection services in part as a commitment to lowering future marginal cost of depositing cash;
• Intra-household bargaining issues play a strong role in the take-up and use of deposit collection services.

The paper lists the findings and the financial impact of the service. There is:

• A substantial increase in savings for those offered the service;
• A slight decrease in borrowing for clients who were randomly offered the deposit collection service.

The paper further proceeds by detailing:

• The experimental design and setting for the study;
• The determinants of take-up of the deposit collection service.

The paper concludes with the following:

• The expansion of lending mechanism through savings collectors will reduce the cost associated with individual-collector savings mechanism;
• The shift to the formalization of deposit collecting may also be helpful in removing information asymmetries in lending markets;
• There is a demand for savings vehicles that help individuals save when they otherwise do not;
• There is still scope for learning about the behavioral responses these savings products invoke to understand:
  • What drives the decision to save?
  • How to best design savings products?
  • Who to target?