Citi IPA Financial Capability Research Fund

Over 40 percent of the adult population in developing countries holds an account with a formal financial institution today. However, as recent loan repayment crises around the world demonstrate, improved access to financial products and services is only part of the formula for financial inclusion. Access alone is not sufficient to promote healthy financial behaviors. With the support of the Citi Foundation, the Citi IPA Financial Capability Research Fund (FCRF) incubates, develops, and rigorously evaluates products and programs that improve the ability of the poor to make informed, welfare-enhancing financial decisions. The objective of the fund is to support tests and evaluations of innovative product designs and product-linked financial education interventions that aim to improve financial capability.

IPA researchers have already identified a number of promising avenues for improving financial behavior through training and product design. In the Dominican Republic, a study found that a training focusing on a few simple "rules of thumb" was significantly more effective in improving microentrepreneurs' financial management compared to a traditional training on basic accounting techniques. Another study conducted with three financial institutions in Peru, Bolivia and the Philippines offers encouraging results on the impact of simple reminders on savings account balances: monthly reminders were found to significantly increase savings balances and help clients meet their savings goals.

The fund will continue to push forward research on training and product design, prioritizing evaluations of cost-effective, client-based interventions that – if found effective – provide a promising business case for scale-up.

COMPETITIVE RESEARCH FUND

RESEARCH PARTNERSHIP DEVELOPMENT OPPORTUNITIES