Commitment Savings Accounts for Agricultural Workers

Summary

The Equity Bank Kenya commitment savings experiment found that farmers who were offered accounts where they could restrict their own withdrawals until a planting-season date saved dramatically more than those offered standard accounts. The 82% savings gain translated into 37% more spending on agricultural inputs (seeds, fertilizer) and 22% higher output. The mechanism is intertemporal self-control: farmers know they will face spending pressure before planting and use the commitment device to protect savings from themselves. The finding established commitment savings as an evidence-based product category now deployed by microfinance institutions globally.

Research question

"Can commitment savings accounts — where withdrawals are restricted until a savings goal is met — increase savings and investment among smallholder farmers?"

Methodology

Result

Positive

Commitment account holders: +82% savings relative to controls; agricultural input expenditures +37%; output +22%

Evidence strength

Strong

Randomized trial, replicated across multiple sites or studies.

Replication status

Replicated