Policy expertise

Promoting saving in low-income households: lessons from Lesotho, Malawi and South Africa

Policy Area
FinMark Trust
July - November 2013
OPM contact

This project has provided valuable insights into the savings environment in three SADC countries where many low-income households face barriers to saving or rely on informal savings mechanisms. Together with Kadale Consultants (Malawi), we conducted a study for the FinMark Trust and its partners, Support to Financial Inclusion in Lesotho (SUFIL), UNCDF and UNDP in Malawi. The study documented the savings landscape in Lesotho, Malawi and South Africa in order increase understanding of the various mechanisms currently used by low-income people and the barriers and opportunities for expanding their use. The team combined desk-based research with fieldwork, triangulating findings from secondary reviews with those from key informant interviews and focus group discussions in each country. SWOT analyses were conducted for each country and recommendations for action by policy-makers and market facilitators were developed based on the findings. The evidence provided by this project provides a platform to help governments and financial service providers better define policy interventions and products that promote more effective saving and greater financial inclusion.

Savings are increasingly recognised as a major component of livelihood strategies for lower-income households in the SADC region. They can act as a buffer against emergencies, help smooth irregular consumption patterns and contribute towards longer-term investment that supports progress towards national growth and development goals.

However, many households face barriers to saving or rely on informal sector mechanisms. The challenge for policy-makers and financial service providers alike is to develop formal savings mechanisms and/or strengthen informal mechanisms that maximise efficiency for savers whilst also supporting broader macro-economic goals.

This project was established to document the savings landscape within three SADC countries in order to understand the challenges and opportunities of promoting effective formal sector saving amongst low income households.


Our team of experts conducted both desk-based research and fieldwork to assess the savings landscape in three SADC countries: Lesotho, Malawi and South Africa. These countries were selected as they represent different levels of economic and financial sector development and allow for comparisons between low-, middle- and high- financial inclusion environments.

The team combined analysis of the two main financial inclusion databases (FinScope and Findex) with extensive literature reviews to map consumer and market characteristics within each country. Secondary research findings were then triangulated with those from fieldwork exercises including key informant interviews and focus group discussions with a wide range of in-country stakeholders. Comprehensive SWOT analyses were developed for each country and used as a basis for providing recommendations for action for each country.

Specific activities undertaken by the team included:

  • Conducting extensive desk-based literature and documentation reviews
  • Undertaking analysis of data from financial inclusion databases (FinScope and Findex), including combining with other datasets of national income and consumption patterns.
  • Conducting in-country Focus Group Discussions (25) and Key Informant Interviews (75)
  • Completing comprehensive SWOT analyses for the savings sector in Lesotho, Malawi and South Africa
  • Developing strategic recommendations for policy-makers and financial service providers


This project has helped address the knowledge gap around the savings environment in SADC countries. Our research has provided useful insights into the constraints and opportunities around formal sector saving in three countries with differing levels of financial inclusion. In turn, this evidence base should support more informed decision-making, helping governments and financial service providers better define policy interventions and products that promote effective formal and informal sector saving.

Project Manager
Economic Policy Programme Director
Associate Consultant
Associate Consultant