ACSI’s Savings Mobilization in the Amhara Region of Ethiopia: understanding Depositors’ Behavior and Associated Policy Implications

Course ID
Ethiopian Economics Association (EEA)
Tewabe Aysheshim

Enhanced savings services contribute to a wider financial inclusion at regional (or national level) which are important for improved public economic participation. Savings services help to socio-economically empower low income people and facilitate the establishment of stable financial intermediation in a /country. High levels of saving increases the amount of national resources and decreases the need to resort to foreign indebtedness in order to cover domestic investment and consumption demand. Savings Services are crucial for ensuring sustainability of financial institutions. The Amhara Credit and Savings Institution (ACSI) considers the savings services as the basis for ensuring its objectives of institutional and client level sustainability. ACSI has different types of demand based savings services available for the public at large, specifically targeting low income households. This paper aims at documenting ACSI’s experience in savings mobilization and understanding the behaviors and special needs of its existing clients as well as potential clients. It tries to draw conclusions important for policy makers involved in strategy development as well as policy formulation.The actual savings mobilization performance of ACSI, though encouraging, is yet below optimal levels given the market potential available in the region. Voluntary savings deposits fell short of loan portfolio throughout its past operational years. Increasing the range of savings services to encourage broadening of the client base is necessary to raise deposits. Observations of the savings balances of depositors at ACSI branches showed that the majority of the depositors have small amounts of balances and only a smaller group of savers have contributed the larger balances. This shows the usual tradeoff challenge that MFIs are facing between mobilizing larger amounts of savings by focusing on ‘net depositors’ and the continuous effort required to encourage and educate the poor to increase their account balances. In order to realize the potential savings market in the Amhara region, development leaders have an important role for putting in place the desired policy directions for increased savings mobilization. This can lead to take concrete steps towards developing national and regional savings strategy and initiatives which are essential to open new opportunities to MFIs such as ACSI to optimize savings mobilization in the region.

Publisher: Ethiopian Economics Association (EEA)
ISBN/ISSN: 978-99944-54-44-10
Primary Descriptors: ;

Secondary Descriptor: Demand for money

Geographic Descriptors: Ethiopia, Amhara Region
Cataloge Date: 09/30/2015
Broad Subject heading: Saving and Investment
Call Number: 330.963 PRO 2015
Serial Key Title: Proceedings of the Twelfth International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: I
Publication date: 2015-06-01 00:00:00
Conference Place: EEA Conference Center
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annually
Author: Tewabe Aysheshim
Conference date: July 16 to 19, 2014

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