Understanding and Evaluating the Risks of Formal Savings Accounts for OVC Populations

This brief discusses methods for reducing risk associated with abuse or misuse of savings by adults, the potential for deterioration of savings, and the particular vulnerabilities faced by female savers. Savings accounts provided through financial service providers (FSPs) such as commercial banks, credit unions and regulated microfinance institutions can provide a number of benefits to orphans and vulnerable children (OVC) and other vulnerable populations. Savings in general mitigate the effects of livelihoods shocks by providing a financial buffer that supports resilience. Savings accounts in the formal financial system versus informal savings provide security for savings and can serve to incorporate OVC populations within the formal financial framework, enabling them to access to other financial services. However, orphans and vulnerable children may face risks when accessing formal savings accounts. This brief articulates some of the key risks, and potential solutions based on the experience of child and youth-focused saving programs.