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Accessible Financial Services

Pay Yourself Back

Innovations in Poverty Action developed the Pay Yourself Back product as an add-on to any loan type. By leveraging the habits formed by regularly making loan payments, it encourages consumers to keep making regular payments (or a portion of it) to themselves after the loan is paid off.

The idea for Pay Yourself Back came from the observation that, although many people struggle to set aside money for savings, they often are able to make room in their budgets for their loan payments. Payments towards loans and contributions towards savings are thus seen by consumers in different ways, even though they can fulfill the same needs. Pay Yourself Back is designed to leverage a pre-existing habit of making payments to seamlessly convert borrowers into savers. The concept is simple: borrowers make a commitment to continue to make payments after they have finished paying off their loan. Instead of going to a lender, these payments go towards the person’s own savings account, thus they pay themselves back.

Contact Andrew Downin, managing director of innovation, to learn more or watch the Pay Yourself Back recorded webinar.

Final Results

During the incubator's 17-month reporting period, five credit unions opened 48 accounts with $7,318 in savings balances. Originally, six credit unions agreed to participate in the Pay Yourself Back program and four credit unions remained in the program throughout the testing period. One credit union, which was very large in assets and projected to engage the most accounts, withdrew before formally launching due to a change in direction from senior leadership to streamline their product and service offerings. Another credit union, which was very small in asset size and only had 1.5 employees, generated the most accounts in the testing period but changed CEOs in February 2015 and then no longer continued offering the program. 

Recruiting credit unions took longer with this program than it did with some of the other programs causing a delay in gathering data. Based on this, Filene extended the original pilot period in hopes of generating more interest from credit unions and consumers. Even with this extension, there was not a substantial amount of interest that was generated. 

For more details please see the Final Summary Report found in the Resources section.