The GiveWell Blog

Evaluating microsavings

We’re excited about the idea of microsavings as opposed to microlending. But it isn’t enough to see that an organization offers microsavings. We need to know:

  1. Are savings services being provided relatively efficiently? How many clients are served per dollar of operating expenses?
  2. Are clients able to access their funds when they need them? We have heard anecdotal concerns about client dissatisfaction with the difficulty or bureaucracy involved in accessing savings. In addition to the proxies for satisfaction discussed in our earlier post, we’d like to see the “turnover” of client accounts: does money go in and out, or sit stagnant?
  3. What are the interest rates/fees on the accounts? Excessive fees would concern us, but so would extremely generous interest rates, which would make the program less like a savings account than like giving out cash.

Some of the questions at our earlier post (regarding profitability, client income levels, and client satisfaction) also apply.