Savings Behavioral Barriers to Saving This excerpt corresponds to the introduction of the lecture on savings constraints , especially external barriers to saving among the poor. Here’s a detailed breakdown of this section: 🎯 Section Summary: External Barriers to Savings 🔹 Main Point : Even when the poor want to save, formal financial institutions often make it difficult or costly for them to do so. This leads to the central policy question: Is universal access to formal savings accounts an effective or meaningful intervention for the poor? 🧠 Key Concepts and Issues Highlighted : 1. High Transaction Costs for Banks : A poor person might want to save small daily amounts (e.g., $0.20/day). But for banks, handling such small deposits is not profitable due to: Receipt printing Regulatory reporting (e.g., to the central bank) Labor and administrative costs Even if they earn interest (e.g., 10%), on $0.20 they would make just $0.02 annually , whi...