What is Commitment Savings? Getting to Know the Product

This paper addresses the concept of commitment savings as an adequate product for the low-income population. Commitment savings products are known for incorporating specific incentive mechanisms that help clients save small amounts periodically which, over time, allow clients to build savings that can be used for different purposes.This paper is first in a series of four research notes titled Inclusive Commitment Savings in Latin America and the Caribbean (LAC), consolidating the results and research of the ProSavings Program. Key findings based on survey responses from 72 financial entities offering commitment savings products in LAC include:

• Low income people do save. Although circumstances vary when referring to the low-income or poor population given their wide spectrum of saving capabilities. Generally, having a low level of income does not preclude savings;
• There is a growing interest on the part of financial service providers to serve low income clients. Around 92% of the entities were interested in developing new commitment savings products or marketing strategies to mobilize savings among the low-income segment;
• With a good design and an adequate strategy, commitment savings products can play an important role in the mobilization of savings for low-income people.