TY  - JOUR
AU  - Dupas,Pascaline
AU  - Robinson,Jonathan
TI  - Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14693
PY  - 2009
Y2  - January 2009
UR  - http://www.nber.org/papers/w14693
L1  - http://www.nber.org/papers/w14693.pdf
N1  - Author contact info:
Pascaline Dupas
Department of Economics
Stanford University
579 Serra Mall
Stanford, CA 94305-6072
E-Mail: pdupas@stanford.edu

Jonathan Robinson
Department of Economics
University of California, Santa Cruz
457 Engineering 2
Santa Cruz, CA 95064
E-Mail: jmrtwo@ucsc.edu
AB  - To what extent does the lack of access to formal financial services impede business growth in low-income countries? While most research on this issue has so far focused on credit market failures, this paper focuses on the role of access to formal saving services. We conducted a field experiment in which a randomly selected sample of self-employed individuals in rural Kenya got access to an interest-free bank account. As the bank charged substantial withdrawal fees, the de facto interest rate on the account was negative. Despite this, take-up and usage of the account was high among market vendors, especially women. Access to an account had a substantial, positive impact on levels of productive investments among market women, and, within 6 months, led to higher income levels, as proxied by expenditures. These results imply that a substantial fraction of women entrepreneurs have difficulty saving and investing as much as they would like, and have a demand for formal saving devices .even those that offer negative interest rates. Our results also imply a relatively high rate of return to capital for the women in our sample, estimated at 5.5% per month at the median.
ER  -