Research Details

Abstract

Despite the importance of deposit financing for lending, banks in developing countries struggle to attract deposits. In a randomized experiment across 110 bank branches throughout Mexico, a lottery incentive based on net monthly deposits caused a 36% increase in the number of accounts opened and a 21% increase in the number of deposits during the lottery months. Nearly all new accounts (96%) were opened by households previously unbanked at any bank. The temporary two-month incentive had a persistent 2-3 year impact on the flow of deposits and stock of savings, and increased the present value of branch profits by 6%.

Type

Working Paper

Author(s)

Paul Gertler, Sean Kendrick Higgins, Aisling Scott, Enrique Seira

Date Published

2023

Citations

Gertler, Paul, Sean Kendrick Higgins, Aisling Scott, and Enrique Seira. 2023. Using Lotteries to Attract Savings.