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SEED: A Commitment Savings Product in the Philippines

Do savings product designs 'cause' an increase in savings?
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This study aims to investigate the impact that savings product designs have on client savings levels.

The authors use an experimental "action research" project to study how the design of a savings product influences both the type of clients attracted to the product, and the impact the product has on financial savings.

By using rigorous experimental research design with random assignment of participants to treatment and control groups, the study finds that:

  • Any increase in savings is a direct result of the product;
  • The product has a strong effect on savings (after twelve months, average bank account balances increased by 80% on average for all those who were assigned to the treatment group compared to those assigned to the control group).

The authors conclude that:

  • The new commitment product savings design was successful in raising total savings balances, both in households that opened an account and at the microfinance institution (MFI);
  • Women who demonstrate a desire to save, but a difficulty in doing so, are more likely than others to open an account;
  • The significant effect of the SEED product on increasing savings underscores how important targeted and specialized products, with appropriate and client-focused design, are to mobilize savings;
  • This study is a prototype for how to create and test product innovations that not only lead to reliable and robust results for the lender, but also provide a public good to the microfinance community worldwide.