Does limited access to formal savings services impede business growth in poor countries? To shed light on this question, we randomized access to noninterest-bearing bank accounts among two types of self-employed individuals in rural Kenya: market vendors (who are mostly women) and men working as bicycle taxi drivers. Despite large withdrawal fees, a substantial share of market women used the accounts, were able to save more, and increased their productive investment and private expenditures. We see no impact for bicycle taxi drivers. These results imply significant barriers to savings and investment for market women in our study context.
Savings indicators = Average daily bank savings, active bank usage, animal savings, ROSCA contributions;
Business impact indicators= total hours worked, business investment, business revenues;
Expenditure indicators= daily food expenditure, daily private expenditure, net transfers outside of household, net transfers to spouse
Increasing access to accounts increased savings, business related investments, and expenditure levels among female micro-entrepreneurs, but not among males.