Variations in Savings Performance Among Orphaned Adolescents in Child Development Accounts: Case of Rakai District of Uganda

Aim: The HIV epidemic and wars throughout sub-Saharan Africa resulted in an increasing number of orphaned and vulnerable children. To improve life options and reduce poverty among orphaned children, an innovative family-level economic strengthening program in Uganda provides matched savings accounts named as Child Development Accounts (CDA). Over a period of 15 months, 92% of the participants saved in CDAs. There is, however, a significant variation in average quarterly deposits and deposit frequency in CDAs. To understand the variations in savings performance, we examine social support available to these adolescents, as well as main characteristics of the household where adolescents lived throughout the period of the study. Specifically, we address two research questions: 1) Does social support influence savings performance of orphaned adolescents involved in a family-level economic strengthening program based on CDAs? 2) What is the role of current household wealth/assets (including small business, livestock and housing) in influencing savings performance of orphaned children participating in CDAs?

Methods: To address these research questions, we use data from the NIMH-funded study called Suubi (‘Hope' in local Uganda language). The Suubi project used a cluster-randomized design. Fifteen rural public primary schools in Rakai district of Uganda were randomly assigned to control and experimental conditions. The study collected 3 waves of data on 286 school-going AIDS-orphaned adolescents over the course of 15 months. Adolescents in the experimental group received a matched savings account for educational opportunities and/or investing in a small business, financial management classes, and mentorship. To account for school-level clustering, we employ mixed effects regression models with random school-level coefficients. Our analysis is restricted to adolescents in the experimental group (n=137).

Results: The results indicate that adolescents with higher levels of social support are likely to report better savings performance compared to adolescents with lower level of social support (b=.15, p<.001). Current household wealth/assets, specifically having livestock (b=0.22, p<0.1) and adequate housing (b=14,410, p<0.01), are positively associated with adolescents' savings performance. In regards to gender, girls reported better savings performance compared to boys (b=2.06, p<0.05). Savings performance of adolescents living with grandparents and other relatives was lower compared to adolescents living with a biological parent (b=-2.24, p<0.1). Conclusion: The results indicate that given the opportunity, poor families in Uganda use financial institutions to save money for their orphaned adolescents. In addition, the findings of our study point that strong social capital and social networks enhance orphaned children's performance in a family-level economic strengthening program in a poor sub-Saharan African country.