Innovations for Poverty Action is collaborating with Mumuadu Rural Bank in the Eastern Region of Ghana to test the impact of account labeling on the savings behavior of rural customers serviced by susu agents (savings collectors).
The goal of the evaluation is to understand if a purely psychological savings product, that lets customers label funds within an account to direct them towards a specific goal, increases customer savings rates. If the product is successful, this simple financial innovation could mobilize significant additional customer savings for Mumuadu and create more stable safety nets for its customers with little cost to the institution.
To measure the effectiveness of the product, IPA is administering a census survey to all susu customers with active saving accounts across five Mumuadu branches. The census survey includes questions on past financial behavior, business type and size and discretionary spending. Half of these customers are selected at random to be offered the labeled susu savings product, while the remaining customers continue to access existing susu services. IPA then tracks the take-up and savings over 6-months among all participating customers and compares savings levels across the treatment and control groups. Customers are not be monitored in how they use the money they withdraw.
By the end of 2010, the project will show whether account labeling is an effective way to increase deposits and savings levels among susu customers in rural Ghana. By comparing savings levels across different groups, we will analyze whether different labels are more effective in increasing savings or if certain populations benefit more from account labeling than others. At the end of the project, Mumuadu will then decide whether or not to expand account labeling to all active customers.