Running of savings accounts by the rural poor may help stem high dependence on family and friends in urban areas, a new study suggests. The study titled The Effect of Savings Accounts on Interpersonal Financial Relationships: Evidence from a Field Experiment in Rural Kenya, was published is contained in the January edition of Oxford University Press Economic Journal. The study done in western Kenya by three professors from Stanford University, Wesleyan University and University of California at Santa Cruz, established that giving of bank accounts to the unbanked rural poor reduced their financial dependence on wealthier relatives. The research found out that due to limited financial markets in rural locations, many financial transactions occur between individuals, without formal intermediation of banks or insurance companies. The next area of interest is why there was increasing uptake of accounts while only few use them actively for financial transactions.

Source: The Star January 08, 2019 20:48 UTC