Unlocking the Power of Informal Savings: A Case Study
Before launching a digital savings product, one provider needed to know how savings groups already work. So we asked. 156 respondents, representing roughly 1,500 members, and what came back reshaped the product.
Background
Financial service providers were planning to launch a new digital savings product for group members to contribute a small sum of money on a regular basis. Before they could go to market, they needed to understand how informal savings groups operated today and what features and incentives would matter to those groups. They reached out to AfroPavo Analytics to conduct a deeper analysis of informal savings group practices.
Solution
AfroPavo Analytics conducted a comprehensive market research study, which included online and offline surveys, interviews and focus groups with 156 respondents representing approximately 1,500 people currently participating in informal savings group practices.
We analysed the data and identified key insights, such as:
- Females are more likely to participate in informal savings group practices than males.
- Mobile money was the most preferred method of saving, but cash within the group was still used to build trust between members.
- Members joined groups primarily to access lump sums for emergencies, education and working capital.
- Most informal savings groups have a participation size of 10–20 people.
- Trust and existing relationships dominate group formation; new members typically join only on referral.
Based on the research findings, we provided recommendations to the financial service providers on how to position the new digital informal savings group product, focusing on the key insights into the target group.
Results
As a result of our market research and analysis, the financial service providers were able to gain a deeper understanding of the market for informal savings group practices, enabling them to make informed decisions about marketing strategies for this product. They have been able to launch a product that addresses the pain points of the market and create a meaningful customer experience.
