Savings Mobilization Strategies: Lessons From Four Experiences (Focus Note No. 13)

Publication Date: Aug 1998
Published by: Consultative Group to Assist the Poor (CGAP)
Document Type: Paper

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How can microfinance institutions successfully mobilise savings?

Presents comparative case studies of four banks chaired by GTZ in 1996
Highlights seven factors for successful savings mobilisation:

• economic reform and financial sector liberalisation in order to increase competition for MFIs
• governance, ownership, and reputation of the institution
• organisational structure - the closer the MFI gets to its customers, the larger the number of small depositors with access to savings facilities
• savings products and technologies - individual, voluntary, and open-access savings accounts have proved most successful
• risk and liquidity management through strict borrower screening, diversifying the loan portfolio, monitoring borrowers, and following sound provision policies
• prudential regulation and effective supervision - in the absence of effective supervision and the lack of a reliable deposit insurance system, internal auditing often takes on a more important role than external supervision
• lowering the cost of savings mobilisation

• factors that influence the household's decision to hold a savings account
• benefits of savings mobilisation for MFIs
• challenges of savings mobilisation by MFIs