Microfinance and Savings Outreach: What are We Measuring?

Estimating the number of empty savings accounts at MFIs and banks in several countries

This paper looks at how MFIs and banks in Bolivia, Nicaragua, and Pakistan, as well as cooperatives among a mix of countries worldwide report their savings data. It gathers data on the account ownership and savings activity and performs a comparison between the dormant and empty accounts. It also studies whether deposit accounts serve as vehicles for savings or transactions. The paper makes the following observations:

  • About 50-75% of savings accounts are empty, while balances of non-empty accounts are at least double the average reported size;
  • Rather than reaching a broad base of traditional microfinance clients, many MFIs are reaching a substantially smaller number of families in the lower middle class and above;
  • Institutions with a mission to serve the poor may not have an incentive to close empty accounts: on the one hand, they can be used to maintain contact with the client and, on the other, they help show better outreach figures;
  • Most commercial banks wouldn't normally see the same benefits for keeping empty accounts open as they don't have (or need to measure) the financial inclusion objectives of many MFIs.

About this Publication

By Rozas, D. , Erice, G.