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Lotto-to-Save: Leveraging Haitian Lottery Culture to Catalyze Saving by Rachel Bernstein

What if you could save small amounts each day on your mobile phone? What if your savings also gave you a chance to win the lottery?
        My research was motivated by the question: How can Haitian passion for lottery be harnessed to open more productive financial services? Given the lack of information available on traditional lottery and financial strategies, we undertook primary data collection to explore lottery and savings behavior in Haiti from June through November of 2015. In partnership with Digicel, the country’s largest mobile operator, we conducted a phone survey of over 700 individuals. Analysis of the data examines lottery play and saving statuses and behavior patterns and the relationship between them. The results suggest there is an opportunity for lottery-linked micro-savings via mobile money platforms.
        An important finding in our data analysis is that savings and lotto statuses are complementary. This implies that those who save are also active in other financial strategies and that lottery may be an ideal mechanism to encourage people who do not yet save to begin, and those who are already saving to increase their balances. There is some emerging evidence, that this is the case for other savings mechanisms linked to lottery. (Read the studies here and here.)
       We also now know that at least 43% of Haitians play the lottery, spending upward of 66,000HTG (1,320 USD) per year on average in wagers. Eighty percent of players are saving less than this amount during the same period since wager amounts approximate 80% of income on average. The apparently high daily purchasing power reflected in wager amounts means that there is room to increase savings even and especially among the relatively least wealthy. Thus there is a ripe opportunity for innovation in savings offerings. Hello ‘Lotto-to-Save’.
      This lottery-linked micro-savings product might resemble traditional lottery but automatically divert a portion of wagers to a savings account or, alternatively, reward savings balance milestones with lottery tickets. To make such small transactions feasible, the product would be built on existing mobile money platforms which were launched in Haiti with USAID support in the aftermath of the 2010 earthquake. The most frequent and familiar financial transaction for Haitians, lottery is an ideal entry point to build trust in mobile financial transactions and (semi-) formal savings mechanisms.

      Plans to pilot a lotto-linked savings product in Haiti are underway pending funding awards. The pilot will provide further evidence of the potential for lottery-linked savings to catalyze savings in Haiti as well as in other markets in the region and around the world. Such products also hold promise as the gateway to accessing further financial services as consumers build a trackable record that could be used for rating credit-worthiness and eventually extending loans. Accumulated savings in lottery-linked accounts may also prompt similar savings habits in regular e-wallets or mobile savings accounts.

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