Personalizing or Reminding? How to Better Incentivize Savings among Underbanked Individuals

We use a randomized control trial to evaluate why text message (SMS) reminders may have worked in previous studies to incentivize savings. In a sample of underbanked Paraguayans, we replicate the previous findings that personalized SMS reminders have short-lived impact on savings targets and amounts, and that savings is mostly done through informal mechanisms. However, we find that either receiving generic SMSs or personalized reminders on their own help little to encourage savings behavior (and sometimes even reduce it) and only their combination plays a positive role.

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