Savings allow for smoothing consumption in the face of irregular income, accumulating financial assets to fund expected large expenditures in the future (e.g., wedding, university education, etc.), and coping with unexpected events. Its relevance is assumed by most but savings data, and particularly savings metrics to evaluate the outreach and effectiveness of savings products and programmes, have not been given enough attention.
The ‘Better Metrics for Effective Savings’ Action Group was created in March 2021 to bring together different sector stakeholders to focus specifically on these data. By highlighting the relevance of savings metrics and improving savings data collection and analysis, the Action Group aims to contribute to:
- better product design by FSPs in order to carefully answer to clients’ needs and preferences,
- better design of savings programmes by donors/funders,
- more customer-driven investment decisions by investors,
- better design of research programmes on savings impact on the well-being of low-income populations,
and to inform supervisors and policy makers’ decisions on regulations and financial inclusion policies and strategies.
During 2021, with the support of two consultants, Nishant Kumar (lead consultant) and Alexis Nyamugira Biringanine (junior consultant), the Action Group worked on mapping out savings indicators already being collected, identifying the actors involved in the process, as well as indicators although not currently being collected, are considered to be relevant by the sector stakeholders. In this process, the consultants have reviewed secondary data (e.g., Global Findex and ATLAS indicators) and interviewed key staff at different FSPs, fintechs and supporting organisations such as WSBI and AFI. From this initial analysis, the consultants have identified main challenges to collect and analyse savings data, and they have created a reference savings taxonomy – a blueprint that can be used by FSPs and other organisations to design a system to collect and categorise savings data adjusted to their objectives and the savings programmes they offer. The report as well as the reference taxonomy prepared by the consultants is available in the Resources below.
From this work and the exchanges between AG members and FSPs, it became clear that savings data, beyond data associated with business growth, are still incipient and its value is not widely recognised across the sector. The next activities of the AG will, thus, build on the previous work to understand how data can strengthen the social and financial business case for savings.