Flexible Loans and Locked Savings for Female Market Vendors in India
Michael King and William Jack (Georgetown University)
Innovation for Poverty Action (IPA)
3,200 female market vendors in Maharashtra
Financial Inclusion and Micro-enterprises
Funded by Innovation for Poverty Action, this study investigates the impact on the business performance of female market vendors of innovative loan products involving increased flexibility in borrowing and repayment schedules, as well as an offsetting locked savings account that allows clients to build up savings while reducing interest rates on their loans. The research comprises of an 18-month randomised control trial with 3,2000 female market vendors in 40 markets. The 3,200 female vendors will be divided into five groups and the four groups will be offered different financial products at their stall in the market place. To track performance of the different groups, the researchers will use survey and bank data to evaluate whether access to the different products increase microenterprise profit, drive business expansion, and impact household welfare. The banking partner, Mann Deshi, is a cooperative bank founded in 1997 as the first women’s cooperative bank to receive a banking license from the Reserve Bank of India.