Working Paper: NBER ID: w31529
Authors: Paul Gertler; Sean Higgins; Aisling Scott; Enrique Seira
Abstract: Despite the importance of deposit financing for lending, banks in developing countries struggle to attract deposits. In a randomized experiment across 110 bank branches throughout Mexico, a lottery incentive based on net monthly deposits caused a 40% increase in the number of accounts opened and a 21% increase in the number of deposits during the lottery months. Nearly all new accounts (96%) were opened by households previously unbanked at any bank. The temporary two-month incentive had a persistent 2-3 year impact on the flow of deposits and stock of savings, and increased the present value of branch profits by 6%.
Keywords: prize-linked savings; financial inclusion; randomized controlled trial; banking; savings behavior
JEL Codes: G29; G41; O16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| PLS incentive (M52) | number of accounts opened (G21) |
| PLS incentive (M52) | number of deposits made (G21) |
| PLS incentive (M52) | financial inclusion (G20) |
| PLS incentive (M52) | persistent impact on deposits (G21) |
| PLS incentive (M52) | increase in branch profits (G29) |
| PLS incentive (M52) | number of accounts opened during lottery months (H27) |
| PLS incentive (M52) | accounts opened prior to intervention (G28) |