High Hopes

Incentivizing saving for secondary education in Kenya

The transition from primary to high school can be costly, even when tuition fees are low or zero.  In this project, undertaken in 360 schools across Kenya, we provide parents of soon-to-graduate primary school children with a variety of vehicles to save for these expenses, and measure their responses in terms of take-up, amounts saved, and enrollment and attendance at high school.  The primary focus is on a mobile money lock-box, held within a bank account, itself linked to and accessed through a mobile money platform.   Balances held to maturity in the lock box earn a bonus interest rate, but this bonus is lost on early withdrawals, which can only be accessed after a waiting period of 48 hours.  We measure the net effect of the time penalty (the lock) and the interest rate bonus, by comparing a treatment group with a pure control group and with a group that is encouraged to save on their mobile phone, but not in the lock box.  We cross the different mobile money product arms of our RCT with a text messaging intervention reminding users of the goals they set at recruitment.