Access to savings accounts enables poor households to save and build assets that allow them to consume at a desirable pace, invest in health and education, and start or improve income-generating activities. Mobile money-linked savings accounts have the potential to play an important role in the financial inclusion of the poor. However, mobile-linked savings accounts may generate significant “spillovers,” that is, they may impose benefits or costs on those who do not adopt the account. This project analyzes this question in peri-urban Zanzibar, Tanzania. Also, financial inclusion may generate a “multiplier effect,” increasing the income and consumption of non-adopting social network members. The introduction of savings accounts may discourage informal lending or insurance within the social network, potentially making some non-adopting households worse off. Different network members may be affected differentially. For instance, those with whom the adopting household has an altruistic, reciprocating relationship may benefit, yet those with whom they share out of obligation as opposed to altruism may become financially crippled. We will study these issues by randomly providing savings accounts to some “focal” households (and not others), and then examining the consumption, investment, savings, and risk-sharing of households who the focal households identified either as altruism- or obligation-motivated risk-sharing partners.
Alfredo Burlando, Cynthia Kinnan, Silvia Prina
About the Researcher(s)
Alfredo Burlando is an Assistant Professor in the Department of Economics at the University of Oregon. He received his Ph.D. in Economics from Boston University. His current research focuses on the interaction between formal financial markets and informal risk sharing networks in East Africa. His past research has focused on infrastructure development and its impact on health and other outcomes in Tanzania.
Cynthia Kinnan is a development economist at Northwestern University’s Department of Economics. She received her Ph.D. from MIT. Her research investigates how households cope with risk, finance investments, and savings. Her research has examined barriers to risk-sharing in villages in Thailand, how kinship networks and banks interact in Thailand, the impacts of microcredit in urban India, the interactions between risk-sharing, access to savings, and social networks in rural India, and the impacts of migration on non-migrating household members in China. She has ongoing projects in India, Nigeria, and Tanzania.
Silvia Prina holds a Ph.D. in Economics from Boston University. She is Assistant Professor at the Weatherhead School of Management at Case Western Reserve University. Her fields of research are applied microeconomics and development economics. She is currently conducting research aimed at studying whether access to formal savings accounts improves the lives of poor households in Mexico, Nepal, and Tanzania.