2 0 1 5 E A S T A F R I C A E V I D E N C E S U M M I T J U LY 8 - 9 , 2 0 1 5 | N A I R O B I , K E N YA

IMPACT OF SMS REMINDERS ON PENSION SAVINGSAMOS NJUGUNA | JUSTIN WHITE | MONICA WERE

CONTENT

1. Context of the Study2. Problem Statement3. Objectives of Evaluation4. Evaluation Design5. Pilot Study Findings

CONTEXT

Informal sector contributes 50%+ of labour force in developing countries, 85% in Kenya.

Participants have low incomes, high job mobility worst affected by economic and political downturns.

Less than 1% save for retirement in Kenya

In these circumstances, how do we get them to save for retirement?

MICRO-PENSION

Save small amounts regularly. Small savings have big effects on people’s lives (Burgess & Pandes, 2005; Ashraf et al, 2010).

Mbao Pension Plan – centralized micro-pension scheme where participants save Ksh. 20 daily.

Plan has 40000+ members

About 35% (14000) are not saving consistently

OBJECTIVES OF EVALUATION

To determine the impact of SMS reminders on:

1. Consistency in saving2. Amounts saved

SMS REMINDERS

Have been used to remind people to:

1.Vote2.Seek immunization3.Commit to work place goals4.Pay loans5.Save – goal based particularly effective

Framing (positive or negative) influences results

DESIGN – RANDOMIZED ASSIGNMENT

Control Positively Framed Negatively Framed

Total Monthly

Bi-weekly

Monthly

Bi-weekly

2557 852 427 427 427 427

SMS – POSITIVE FRAMES

1. Save in your Mbao Pension Plan to have more money during retirement.

2. Save in your Mbao Pension Plan to earn interest on your money

3. Save in your Mbao Pension Plan to have financial independence during retirement

4. Save in your Mbao Pension plan to achieve your plans for retirement

SMS – NEGATIVE FRAMES

1. Save in your Mbao Pension Plan to avoid running out of money during retirement

2. Save in your Mbao Pension Plan to not miss out on earning interest on your money

3. Save in your Mbao Pension Plan to avoid relying on other people’s financial support during retirement

4. Save in your Mbao Pension Plan to avoid spoiling your plans for retirement

DATA SOURCES

1. Secondary data on savings2. Baseline Data3. Self reported data on experiences

SAMPLE COMPOSITION

No significant difference in:

1.Savings2.Household income3.Years of work4.Use of phone5.Rents or owns a home

Reasons for not saving – did not remember, forgot the savings account number, did not have money

TIME PLAN

Piloting SMS messages – end 31 July 2015

Intervention – 15 August 2015 – June 30 2016

End-line – 1 July 2016 – 31 August 2016