Trust and saving in financial institutions by the poor

Abstract

We randomly assigned beneficiaries of a conditional cash transfer program in Peru to attend a 3 h training session designed to build their trust in financial institutions. We find that the intervention: (a) increased trust in banks, but had no effect on financial literacy, and (b) increased savings over a ten month period. The increase in savings represents a 1.4 percentage point increase in the savings rate out of the cash transfer deposits, and a 0.4 percentage point increase in the savings rate out of household income.