Imagine that you receive a grant from the Bill & Melinda Gates Foundation to give money transfers to families living in poverty. Yet, the selected country does not have formal income records. As a consequence, you decide to collect income information through a household survey. On your way to collect the information, you find an economist who points out two problems: (1) income can be measured with a lot of noise; and (2) individuals may have incentives to sub-report income to participate in the program.
People in developing countries, much like people everywhere, save. And in Sub-Saharan Africa, beyond banks, folks save through a bunch of techniques -- ranging from the less sophisticated under the mattress savings to the more complex community-based rotating savings and credit associations (ROSCAs). Given this plethora of savings options, one might wonder if an NGO program that set up savings groups but injected no capital or lockboxes or any other capital intensive intervention might make a