FinDev Blog

How Do Savings Contribute to Financial Health?

A meta-review leads to two mental shifts in approaches to savings research
Savings group in Senegal, women sitting and handing over cash.

It’s almost a no-brainer that savings – money set aside or the habit of setting money aside – is an integral part of financial health. But how do savings contribute to financial health, and how do we know? 

As part of Itad’s Savings Learning Lab activities, we reviewed existing research literature on savings to see whether the evidence base supports the assertion that savings contributes to the critical dimensions of financial health, including smooth day-to-day finances, resilience, long-term goals and confidence.

What we found confirmed that savings – especially participation in savings groups -- contributes to financial health. This was not a surprise. The bigger takeaway was a shift in the way we think about savings and savings research. In this post we discuss two mental shifts that convinced us that it’s important to design research on savings using a financial health lens.

Mental shift #1 – Look beyond deposit amounts to how saving fits into financial health

Our review covered many studies of informal or quasi-formal savings groups of various types. These studies strongly concluded that being in a savings group helps people become financially healthier. The benefits, however, derived not just from amassing savings but also from other aspects of being in the group, such as maintaining the ability to borrow, gaining leadership experience through group participation, pursuing economic activities collectively and learning from peers. In fact, we would argue that savings group is not really the right label. These groups are actually financial health groups!  They respond to the holistic nature of financial lives, providing people with a flexible tool that can enlarge a person’s ability to manage their finances in a variety of circumstances.

By contrast, a number of the other savings studies – and sometimes the projects they studied – focused on a single activity and mode of saving, such as increasing balances in a particular savings account. Many studies simply query savings balances, and it is easy to see why. Not only is a savings balance an easily verified, objective indicator, but it is also clearly in the interests of financial service providers and program supporters to know whether a particular intervention – such as door-to-door collection or digitization – increases amounts saved. While valuable to financial institutions tracking their key performance indicators, these studies shed little light on financial health, leaving open the question of whether savers actually benefitted.

These observations took us to mental shift #1: We need to look beyond deposit amounts to understand how savings fit into people’s overall financial health.  Studies on savings should investigate the purpose of savings, such as putting aside money for old age or maintaining future access to credit. They should look at where increased savings come from, whether from simply shifting savings from one place to another, or from surpluses generated by reduced expenditure, or from some other source. With attention to questions like these, research on savings can shed greater light on whether and how savings activities benefit savers.

Mental shift #2 – We don’t know enough about the connection between savings and resilience

While many of the savings studies we found addressed elements of financial health, including day-to-day finances, long-term goals and confidence, few addressed resilience - the ability to meet financial shocks.  Those that did mention resilience focused primarily on day-to-day finances and food security. Many people who live on the lower edge of financial health end up skipping meals or reducing food quality when shocks arise, and several studies concluded that savings led to lower frequency of this type of risky behavior.  

However, in the research we reviewed, little attention was paid either to saving specifically for emergencies or to how people use savings during emergencies. An important area for further study, therefore, is to understand more about how people with and without emergency savings respond to shocks, including the type and frequency of risky behavior they are likely to adopt. We would also like to see researchers address the nature and frequency of shocks people encounter and how they cope. The COVID-19 pandemic has created a surge of interest in resilience, and we are encouraged that more research will emerge in the near future.

Let’s ask more meaningful questions

Our look at the savings literature convinced us that it’s important to design both savings programs and savings research more holistically, using a financial health lens.  In addition, the link between savings and resilience – how savings assists people who experience shocks or bad times – has been under-studied and needs greater focus. Placing this research in the context of individuals’ pursuit of financial health will help us to ask more meaningful questions and ultimately get more meaningful answers as to how savings benefit savers.

Watch the webinar recording on this topic!

The Role of Savings in Promoting Financial Health (16 Jun 2022)


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Rajesh Kumar Verma , Kabir Foundation, Khajuraho., India
02 August 2022

Dear all,
Savings and its habit definitely are a plus plus, but the hitch comes in the shape of unbridled desires.
So to be effective one needs lots of restraining capacity and a moral confidence,
"That things do change with persistence."
Rajesh k Verma

Elisabeth Rhyne , US
14 June 2022

Thanks, Getaneh -- Your comments illustrate the kind of in-depth thinking about savings we wished for when we did the review.
On gender implications, we many studies found learning and confidence-raising due to savings groups, but generally within the confines of women's traditional spheres of action.
As for pension saving, efforts to make it available to people in the informal sector are so important -- as for example the work on "micropensions" from
Best regards, Beth

Getaneh Gobezie , Independent Consultant, Ethiopia
22 June 2022

Dear Elizabeth
Thank you for these great insights… I will definitely review the resources on Pension Saving at the web-site (
I strongly believe that facilitating dialogues among women and men are critical to promote shared attitude, collaboration, better impact, etc... In fact, last few months, there have been a number of Webinars (sponsored mainly by UN-FAO) advocating on GENDER TRANSORMATIVE approaches at the grassroots..... Many argue that ''access to finance'' could be (one of) the best interventions to serve as an ''ENTRY POINT'' for such gender transformative initiatives.
The most effective intervention on tackling the established gender norm (that I know) is the Gender Action Learning System (GALS), piloted in western Uganda (Bukonzo area), but being replicated in many African, Asian and Latin American countries, mainly sponsored by IFAD and Oxfam Novib, Hivos, etc. Such programmes have staff well trained on gender to facilitate discussion (by men and women) at regular microfinance (VSLA) group meeting (raising issues like who in the household does (decides) what, why, advantages/disadvantages, and facilitating household joint visioning, planning, etc. The programmes report positive results, as men (as well as women) change their attitude and behavior on gender, etc. More info at:
This tool has been selected as one (on the top) of the 15 tools identified by UN-FAO as ''good practices'' gender transformative approaches, in a book (published 2020): GENDER TRANSFORMATIVE APPROACHES FOR FOOD SECURITY, IMPROVED NUTRITION AND SUSTAINABLE AGRICULTURE

Further related discussions (blogs) on same are posted at:

Thanks and Regards,

Thies Reemer
24 June 2022

Thanks Getaneh for those reflections and resources. Indeed it is also my experience that savings groups and saving & lending associations etc. provide a great entry point for a gender transformative approach like GALS. But it really works 2 ways: a gender transformative approach (GTA) really increases the impact of interventions related to saving and credit. Often, I heard both women and men say "now we finally know what we save money for" as they developed their household visions for better livelihoods and gender equality. The typical behaviour changes (as a result of GALS and other gender transformative approaches) include changes in decision making power between women and men about income, assets and expenditures, directly contributing to "financial health". The changes in the gender division of labour, social acceptance of women's increased social and political participation and mobility and the reduction of gender based and domestic violence further enhance the "good marriage" between saving groups and GTA. In every project I did with Oxfam that had a financial services / savings component this was confirmed.
Apart from the GTA Compendium and the Gamechangenetwork that you mentioned Getaneh there are many examples, assessments, guides and manuals available at
Thanks and best regards,
Thies Reemer

Getaneh Gobezie , Independent Consultant, Ethiopia
26 June 2022

Dear Thies... Thank you very much for your great input, re-emphasizing the need (and the opportunity) in integrating gender transformative intervention like GALS with financial services. Perhaps we can hear more from you on GALS as you have also been highly involved in the programme for many years...
I like your ''good marriage'' phrase .... On the one hand ''saving services'' (appropriately managed) proved to be a key source of women's empowerment. In fact, one of the special characteristic of ''cash'' saving (now increasingly being ''digitized'') is the fact that it is ANONYMOUS (secret, whether the value is $10 or $1000, etc), unlike other forms of savings (e.g livestock, which are visible), which gives the opportunity to 'hide' resources from potential claims from neighbours, household members, etc. Valuable in some respect, this can also be a great source of suspicion, mis-trust among partners, unless there is an effective intervention to counter this. ... The GALS intervention (and also the ''Gender Dialogue'' by CARE at many USAID programmes, among others) aim to promote mutual trust and collaboration. Ruralfinance ''group meetings'' (including VSLAs and other Self Help Group meetings),often conducted monthly and weekly, provide COST EFFECTIVE platforms to facilitate dialogues and trainings at regular intervals for participating women and men. As you rightly highlighted Thies, there are many reports highlighting very encouraging positive outcomes on livelihoods in general, as well as gender equality at the very grass-root, starting from joint business plan highlighting fair division of labour, etc.... My observations in ruralfinance for the last many years, however, suggest that there has been little attention to such ''integrated'' intervention both by financial service providers, as well as other grass-root actors concerned with ''women's economic and social empowerment''. ... I look forward to hear more.
Related discussion is posted at:…
Regards, Getaneh

Getaneh Gobezie , Independent Consultant, Ethiopia
10 June 2022

Thank you for this post on saving...

I think one of the key issues often little discussed in research programmes is the potential contribution of having an (independent) saving account for women's financial lives (especially those women facing patriarchal risk). Such an opportunity ensures that wives can have ''control'' of income, and invest on e.g child care, or other productive activities. There are research outcomes highlighting the fact that women who are not sure of having control on her newly earned income (or even the newly accessed loan) are very reluctant to apply for loan, even when it is availably nearby and very accessible!! There are also evidenced suggesting saving services for women giving rise to intimate partner violence. ... Are there any evidence of financial service providers integrating gender awareness with saving programmes?

Grameen Bank's Pension Saving programmes has been so attractive to many MFIs in Africa, because of its potential impact on poor clients, who are often focused on immediate needs, to plan for long term objective. With their old age secured, households are presumed to opt for ''fewer number of children'' (as old age security. This can greatly complement government's population policy!1... Do we have more real evidence on this.

Our earlier report for the World Bank, DfID and DAI is posted at this web-site…

I hope we can exchange more ideas on these.
Regards, Getaneh

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