Lotto-Linked Savings Accounts

Project Description

About 80% of Haitians are unbanked. Only 23% save money outside of their home through a formal or informal mechanism (World Bank, 2014). This lack of access to financial services imposes an added hardship on the poor who face a variety of unmitigated risks. Various constraints to microsavings have been extensively studied such as transaction costs, lack of trust and regulatory barriers, information and knowledge gaps, social constraints, and behavioral biases. Addressing these savings constraints can be particularly effective at mitigating risks and alleviating poverty. Mobile money has also proven to be a sound platform for financial transactions, and has been shown to improve the ability to mitigate risk. Yet the immense success of mobile money, say in Kenya, is not quickly replicated elsewhere. Among the Haitian working poor we introduce a novel mobile money based lotto-linked savings account or LLSA. By combining both mobile money technology and the pervasive lottery culture, the LLSA may help individuals build savings and introduce individuals to broader financial inclusion.

Lead Researcher