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Liquidity Is King: Mobile Savings Vehicles For Poor Individuals

This is the final post of this three-part blog series co-authored by Lisa Kienzle, Ali Ndiwalana, Olga Morawczynski and Ignacio Mas on saving with mobile money using deferred payments or “Me2Me” transactions. The first post explored user reactions to deferred payments and to goal-based accounts, gathered through focus groups. The second post looked at rewards that help individuals set aside money to meet financial goals. Today, the authors discuss ways to encourage individuals to keep money in their savings vehicle(s).

During the focus groups in Fort Portal, in western Uganda, people quickly grasped the notion of deferred payments as a means of saving. However, one of the most common questions that people asked was, “What if I need to access my money earlier?"

Liquidity is always top of mind especially for people near the bottom of the economic pyramid, of course. We tested several features, ranging from full illiquidity (can’t touch the money until a specified future date) to full liquidity (take out any amount, anytime). But we also presented a few other options to the individuals in our test group: