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Using Lotteries to Attract Deposits

Author

Listed:
  • Paul Gertler
  • Sean Higgins
  • Aisling Scott
  • Enrique Seira

Abstract

Despite the importance of deposit financing for lending, banks in developing countries struggle to attract deposits. In a randomized experiment across 110 bank branches throughout Mexico, a lottery incentive based on net monthly deposits caused a 40% increase in the number of accounts opened and a 21% increase in the number of deposits during the lottery months. Nearly all new accounts (96%) were opened by households previously unbanked at any bank. The temporary two-month incentive had a persistent 2-3 year impact on the flow of deposits and stock of savings, and increased the present value of branch profits by 6%.

Suggested Citation

  • Paul Gertler & Sean Higgins & Aisling Scott & Enrique Seira, 2023. "Using Lotteries to Attract Deposits," NBER Working Papers 31529, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31529
    Note: CF DEV PR
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    More about this item

    JEL classification:

    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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