Savings Groups; VSLA; Financial Inclusion; Microfinance; Self-help Groups; JEL classification; O12; O16;
JOURNAL ARTICLE | Journal of Development Economics | 128 | September 2017
Does Group Inclusion Hurt Financial Inclusion? Evidence from Ultra-poor Members of Ugandan Savings Groups
Millions of ultra-poor households in sub-Saharan Africa rely exclusively on savings groups to meet their financial needs. However, the ability of savings groups to fully meet these needs remains unclear.The authors randomize at the village level the proportion of ultra-poor members of newly-formed savings groups. They find that scarcity of loanable funds is more severe in poorer groups and affects disproportionately their poorest members. A trade-off emerges between the inclusion of ultra-poor households into a savings group and its ability to provide credit to these same ultra-poor households.