The Data

After making their daily rounds to the homes and businesses of their customers, the records of SafeSave collectors are entered into database software for use by management. We use the daily data to calculate basic measures of saving and borrowing and then aggregate them to the monthly level. Most of the variation in loan balances occurs between months, rather than within, so little relevant information was sacrificed through aggregation. In addition to financial variables, we also know the customers’ ages, gender, and length of time with the bank. Given the long time-series dimension, we can control for time invariant unobservables using fixed effects.

Most of the analysis focuses on 68,037 month-customer observations between January 1999 and January 2001. They reflect data on 5,147 customers, not all of whom are part of the program during the entire period. The change in the interest rate occurs midway through the sample, in February 2000.

Table 1 [ PDF 161.4KB | 7 pages ] provides summary statistics for the sample, restricted to the dates we study. Two thirds of the clients are women (or girls), with an average age in the late twenties. The financial data show that in all three branches, monthly deposits to savings are small, averaging about 55 taka (or $2.53 in January 2000 US dollars). In Tikkapara and Kalyanpur, which had started several years before Geneva, accumulated savings balances averaged 579 taka (or $26), while in Geneva the average savings balance was 217 taka (or $10). Average loan sizes are small relative to those from other microlenders (at 1051 taka, or $48, in Tikkapara and Kalyanpur and 891 taka, or $37, in Geneva). Loan balances (which reflect partial repayments) are similar in the branches – about 434 taka ($20) in Tikkapara and Kalyanpur and 480 taka (or $22) in Geneva. The typical length of a loan cycle is short, approximately one month between the time a loan is taken and repaid. Each repayment is relatively small, 200 taka (or $9.25) in Tikkapara and Kalyanpur and 405 taka (or $18.66) in Geneva, corresponding on average to repaying a quarter of the loan each week or half every two weeks.

Download this Discussion Paper [ PDF 239.7KB| 23 pages ].

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