Uptake, Use, and Impact of Islamic Savings: Evidence from a Field Experiment in Pakistan

48 Pages Posted: 3 Feb 2021

See all articles by Syedah Ahmad

Syedah Ahmad

University of Groningen - Faculty of Economics and Business

Robert Lensink

University of Groningen - Department of Economics, Econometrics and Finance; Wageningen UR - Development Economics Group

Annika Mueller

University of Groningen - Faculty of Economics and Business

Date Written: June 15, 2020

Abstract

This study examines the take-up, use, and impact of Islamic savings accounts for poor Muslim clients of an MFI in Pakistan, using a randomized controlled trial. We specifically focus on the impact of opening Islamic savings accounts on women’s empowerment. The main results strongly suggest that a successful intervention to increase uptake of savings among a sample of mainly poor, Islamic women needs to address a combination of economic external constraints (being illiterate, facing credit constraints) and internal constraints, shaped by religious and cultural barriers. We find strong evidence that women who have opened savings accounts obtain more bargaining power with respect to health and marriage-related issues. Moreover, they display a much higher degree of self-esteem, which may provide a basis for gaining more bargaining power relative to their spouses or parents. Thus, an active policy that motivates poor Islamic women to open savings accounts may be an effective strategy to kick-start a process of women’s empowerment.

Keywords: Islamic savings, Uptake, Usage, Impact, Religious speech, Account opening subsidy, Assistance; Encouragement Design; Pakistan; Women’s empowerment

JEL Classification: C93, D14, G21, G40, G51, O12, O53, Z12.

Suggested Citation

Ahmad, Syedah and Lensink, Robert and Mueller, Annika, Uptake, Use, and Impact of Islamic Savings: Evidence from a Field Experiment in Pakistan (June 15, 2020). Available at SSRN: https://ssrn.com/abstract=3743428 or http://dx.doi.org/10.2139/ssrn.3743428

Syedah Ahmad

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Robert Lensink (Contact Author)

University of Groningen - Department of Economics, Econometrics and Finance ( email )

P.O. Box 800
9700 AH Groningen
Netherlands

Wageningen UR - Development Economics Group ( email )

Hollandseweg 1
WAGENINGEN, 6706 KN
Netherlands

Annika Mueller

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

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