In collaboration with IPA Sierra Leone and the Catholic Agency for Overseas Development (CAFOD), researchers conducted a randomized evaluation to measure whether upgrading Village Savings and Loans Associations (VSLAs) to operate as digital financial service agents expanded financial access in previously unserved communities. They also measured whether adding consumer feedback platforms improved agent service quality. Introducing digital financial services increased account ownership by 7.2 percentage points. Adding consumer feedback enhanced this effect and increased account usage by 11 percentage points, as agents improved their privacy practices and consumer trust grew. Participating VSLAs also had greater digitization of member savings contributions, lower default rates, and higher group-level income. Results altogether suggest that VSLAs can expand access to digital financial services, and that accountability mechanisms can help translate this into meaningful gains in financial inclusion.

The Challenge

In low- and middle-income countries, rural households and small enterprises face constraints in saving, transferring funds, managing risk, and financing productive investments, as formal financial markets are often absent in these areas. Mobile money has emerged as a promising avenue for extending formal digital financial services (DFS) into rural areas.¹ At the same time, retail agent networks in Sierra Leone—where over 60 percent of the population lives in rural areas—have remained concentrated in urban centers due to high operating costs and fragmented demand.

Village Savings and Loans Associations (VSLAs) have tended to fill this gap, offering communities an institutionalized setting for borrowing and saving. VSLAs hold established local reputations, manage significant internal capital, and have demonstrated an ability to reach historically excluded populations, particularly women,² who make up over 60 percent of VSLA membership in Sierra Leone. This positions VSLAs as natural entry points for extending DFS into underserved communities. However, in markets with limited competition and weak formal enforcement, agents may exert low effort, charge opaque fees, or deliver unreliable service.³ This raises the question of whether consumer accountability mechanisms can improve service quality and ensure households capture the full benefits of digital financial access.

The Evaluation

In collaboration with IPA Sierra Leone and CAFOD, researchers conducted a randomized evaluation in rural Sierra Leone to measure whether upgrading VSLAs to operate as DFS agents expanded financial access and whether a consumer feedback platform improved service quality. The intervention involved 200 rural communities with no prior access to formal DFS, randomly assigned to three groups:

• Upgrade: VSLAs were enrolled as formal retail agents for Orange Money and GT Bank, represented by two community agents, one male and one female, who operated on the VSLA's behalf. Each agent received standardized retail equipment and seed funding to cover initial operating costs.
• Upgrade and Feedback: VSLAs received the same infrastructure upgrade and seed funding, in addition to a monthly anonymized consumer evaluation platform. Users rated local agents on fees, privacy, transparency, reliability, and overall satisfaction, and these ratings were shared publicly as an accountability mechanism during community forums.
• Comparison group: Communities continued to operate under existing informal financial arrangements.

Researchers measured indicators including financial access and usage, service quality, consumer trust, and VSLA and household economic performance.

Results

Results show that upgrading VSLAs to provide digital financial services had a positive impact. Communities receiving the VSLA agent upgrade experienced a 38 percentage point increase in agents (a 64 percent increase) and a 7.2 percentage point increase in DFS account ownership (an increase of 29 percent). However, account usage did not rise meaningfully on its own.

The effect of upgrading VSLAs deepened when structured consumer feedback was added, as DFS account ownership increased by 10 percentage points (a 39 percent increase) and usage increased by 11 percentage points (a 29 percent increase). This usage increase was driven by greater use of local agents, more peer-to-peer transfers, a shift toward digital savings, and higher remittance activity. With higher accountability, agents substantially improved their service quality and practices for protecting the privacy of consumers’ transactions and services; in turn, consumer trust in agents rose by 5.3 percentage points. As a result of this increased activity, communities also had stronger financial outcomes, including greater digitization of VSLA member savings contributions, lower default rates, and higher group-level income.

Taken together, these findings suggest that VSLAs can serve as settings to expand digital financial services in rural areas, but adding consumer accountability mechanisms can help translate access into meaningful improvements in service quality, provider behavior, and financial engagement.

Sources

^1. Tavneet Suri, Jenny Aker, Catia Batista, Michael Callen, Tarek Ghani, William Jack, Leora Klapper, Emma Riley, Simone Schaner, and Sandip Sukhtankar, “Mobile Money” VoxDevLit, 2(2), February 2023

Batista, Catia, and Pedro C. Vicente. "Is mobile money changing rural Africa? Evidence from a field experiment." Review of Economics and Statistics 107, no. 3 (2025): 835-844.

^2. Karlan, Dean, Beniamino Savonitto, Bram Thuysbaert, and Christopher Udry. “Impact of savings groups on the lives of the poor.” Proceedings of the National Academy of Sciences 114, no. 12 (2017): 3079–3084.

Ksoll, Christopher, Helene Bie Lilleør, Jonas Helth Lønborg, and Ole Dahl Rasmussen. “Impact of Village Savings and Loan Associations: Evidence from a cluster randomized trial.” Journal of Development Economics 120 (2016): 70–85.

^3. Annan, Francis. 2025. “Misconduct and Reputation under Imperfect Information.” Journal of Political Economy 133 (5): 1460–1496.

Garz, Seth, Xavier Giné, Dean Karlan, Rafe Mazer, Caitlin Sanford, and Jonathan Zinman. 2021. “Consumer Protection for Financial Inclusion in Low and Middle Income Countries: Bridging Regulator and Academic Perspectives.” Annual Review of Financial Economics, 13(1): 219-246.

Blackmon, William, Rafe Mazer and Shana Warren. 2021.“IPA Consumer Protection Research Initiative: RFP Overview.” Report, Innovations for Poverty Action, Washington, DC.

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