Digitising Savings Groups: Impact Evaluation of Savings Group e-Recording Technology in Western Kenya
Michael King and Tara Mitchell
Financial Sector Deepening, Kenya
3,600 members from 1,200 savings groups
This is a joint research project with Financial Sector Deepening (FSD), Kenya. In 2013, FSD together with its partners developed and piloted an Android application, known as e-recording, to savings groups to digitise their recording of financial records. Following this pilot, the application was rolled out to savings groups at the beginning of 2015. The introduction of this technology offers the potential to make a step change in the performance of savings groups and be a catalyst for increases in household level savings. The e-recording device records group transactions at each meeting and provides, on request, basic financial reports at the individual and group level. By using a randomised control trial methodology, this study assesses the impact of the e-recording device on group performance, sustainability, transparency and consumer protection and savings and borrowing by members. It also investigates the existence of local spill-over effects on other savings groups caused by improved exposure to technology, greater expectations of transparency and switching between groups in the treatment area. While the central research questions relate to the impact of the e-recording device on the performance of savings groups and changes in household financial management practices, the underlying policy question relates to the role technology can play in the future success of savings groups. Will the introduction of technology lead to a cementing of savings groups in the landscape of financial services used in sub-Saharan Africa? What level of training is required for successful rollout? To what extent do technological or other spill-overs exist?