Program Costs for Individual Development Accounts: Final Figures from CAPTC in Tulsa

Publication Date: 30 Jul 2004
Published by: Micro Finance Consulting Group
Document Type: Paper (PDF)

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Cost effective approach towards saving in Individual Development Accounts

With the help of a case study of the Community Action Project of Tulsa County (CAPTC), this paper analyzes the program cost incurred by NGOs in running Individual Development Accounts (IDAs). As per the author, IDAs - a new policy proposal design to help poor in saving and asset accumulation - need to be examined in relation with their costs to the society. The analysis in the paper is based on social cost, and the financial cost of IDAs is not included.

Further this paper states that since benefits produced by IDAs are not measured, the cost estimates of IDAs rest on imprecise measurement. The author puts forward the following points:

• Costs of IDAs are in the same range as some human capital programs but are much lower than of other programs;
• Costs of IDAs depend on program design, particularly on the extent of program services;
• Policy choices become easier with cost measures in hand.

• This study looks into a single IDA program;
• It did not take count of all costs;
• Costs are best considered in the context of benefits and that was not available.

• Identifying benefits beyond saving and accumulation;
• Improving the quality of IDA services;
• Finding innovative way to reduce the cost.