Encouraging Saving Through Goal Tracking

State and Development Partner

Andhra Pradesh, Telangana

IDinsight

Problem

Despite the extension of formal financial products in rural areas through bank agents (BCs), account usage remains low due to behavioural barriers like low attention and planning towards saving. Saving is not considered essential and hence is not a common practice.

Conventional Solution

Traditionally, BCs encourage potential customers to use financial products through interpersonal communication. Posters in public areas or outside banks do the same to recruit more customers by targeting the unbanked and underbanked rural population, However, not enough focus is placed on encouraging people to save money in their bank accounts through these channels.

Behavioural Insights Based Solution

This solution aims to address the problem of low formal savings through an intervention that combines behaviourally-informed savings calendar and communication with agents. Agents distribute and explain this financial calendar that includes goal-setting and recording features designed to remind customers to plan for saving. Agents are also trained to encourage customers to save money formally and receive SMS reminders. This nudges both agents and customers towards building formal saving habits and tracking goals that are laid out in the calendar. Starting a bank account can seem like a daunting task for someone who is semi-literate or illiterate. Thus, understanding the value of saving is an essential first step to bring people into the banking system.

Lesson

This initiative was rolled out in February 2020 through 800 agents in Andhra Pradesh and Telangana. While results are awaited of the experiment, the biggest lesson from the field is that people need nudging towards positive behaviour and get over the inertia that stops them from bringing positive change in their lives.

Source : Stories of Change from India's Aspirational districts - NITI Aayog publication