In partnership with Grameen Foundation's AppLab, Google, Google.org, and MTN, IPA is examining the impact of a newly launched SMS-based health service. The service allows users to request reproductive and sexual health advice via SMS, as well as to query a directory of local clinics. The research project seeks to test the impact of the service on 1) knowledge of sexual and reproductive health, and 2) related behavior, both self-reported and observed (risky behavior, clinic visits, seeking preventive health services).
The service is available to the whole population; the treatment takes the form of marketing in a random selection of trading centers.
The recent and rapid growth of the microfinance industry in the developing world can be attributed, in large part, to the achievement of impressively high loan repayment rates among microborrowers. However, although final default rates are low amongst microfinance borrowers, late repayment is a much larger issue. While microborrowers have surprised skeptics with their ability to repay loans, microfinance institutions (MFIs) and commercial banks lending to the poor still struggle with relatively high transaction costs and low rates of return. All types of MFIs, from strictly for-profit to mission-oriented, would benefit from inexpensive mechanisms for boosting timely repayment rates and lowering administrative costs per borrower. One such solution may be automated loan repayment reminders sent via text (or SMS) on mobile phones. This study tests the effectiveness of one such intervention in improving repayment and reducing default.
Context of the Evaluation:
Known as the text message capital of the world, the Philippines witnesses the transmission of over 1 billion text messages every day and thus offers a prime setting for testing the effectiveness of text message reminders on improving client repayment rates.
IPA, in partnership with Microenterprise Access to Banking (MABS) and two rural banks in the Philippines, designed a study to test the effectiveness of text message reminders as a tool for boosting repayment among micro-borrowers. Both banks are for-profit institutions that operate individual-liability microfinance lending programs. All new clients at select branches of both banks who had provided cell phone numbers to the bank and who availed of these loans during the study period were automatically enrolled in the study. MABS, a national initiative established to expand financial services, provides technical assistance and training to local banks.
Description of Intervention:
IPA randomly assigned approximately 1,259 new borrowers who had just received their first loans from their respective banks into a comparison group or one of 12 treatment groups (with various combinations of timing, framing, and personalized messages). Beyond assessing the overall impact of text reminders, the study was designed to explore the importance of timing, framing and personalization of the text message reminders. Regarding timing, researchers explore whether messages received two days before the due date, one day before the due date, or on the due date itself prove to be the more useful for reminding borrowers to pay. Secondly, the framing, or psychology, of the message sent was varied between emphasizing either the benefit of compliance or the cost of non-compliance to motivate repayment. Finally the importance of personalizing the text message was assessed by comparing messages with the account officer’s name with those containing the client’s name.
Over the course of 16 months between January 2009 and April 2010, cell phone numbers and payment due dates were submitted by the three partner banks on a weekly basis to an automated text message application that sent the assigned text message to borrowers on the appropriate date. All loans required payments on a weekly basis, and the average loan term at the Rural Bank of Mabitac was three months, while the average loan term at Green Bank was six months.
Following the enrollment of clients into the study, IPA analyzed bank data through June 2010 to examine differences in repayment rates, instances of default, and late payments across the 12 treatment groups. IPA also analyzed the cost of the text message system to the banks, taking into account loan officer time, cost of the software development, and administrative costs.
Access to finance is a critical constraint for small businesses everywhere. Credit provided by up-stream suppliers to down-stream firms (“trade credit”) can relax the constraints on capital. Trade credit can help small businesses, like retail shops and kiosks, to purchase non-perishable goods for resale and free up resources for short- and long-term uses. However,the provision of this type of credit may be limited by high transaction costs, up-stream liquidity constraints, and concerns over repayment. As trade credit agreements in low-income countries usually involve small amounts, judicial systems are unlikely to enforce repayment of loans in court. Without a system to distribute small loans in an economically feasible manner and manage repayment, suppliers have little incentive to extend this service. This project evaluates a new method of extending trade credit facilitated by mobile banking and inventory management technologies and will shed light its potential to foster small business development in a developing country context.
Context of the Intervention:
Working with Financial Sector Deepening (FSD), a Kenyan Trust focusing on development of financial services for the poor, researchers will evaluate a trade credit product that uses a mobile network to increase the efficiency of loan origination and repayment. In collaboration with FSD, a large supplier of non-perishable products (the Coca Cola Bottling Company (CCBC)), and a Kenyan bank (Equity Bank), researchers will conduct a randomized evaluation of the new trade credit product.
This technology has the potential to overcome two particular challenges. First, by reducing the transactions costs of making repayments, new mobile technologies make it economically feasible to offer trade credit products requiring small, frequent repayments. Second, the centralized information system allows centralized monitoring of both credit and repayment histories.
CCBC will automate their supply chain, enabling every case of product to be recorded and tracked at the retailer level. A natural next step in the automation process is to integrate financial transactions. This project takes advantage of this advance in supply chain automation to build in a trade credit product. In particular, the tracking system will allow real-time monitoring of both cash and mobile phone-based transactions, and hence enable more efficient administration of credit contracts. Critically, the trade credit will be provided not by the independently owned distributors, but by Equity Bank via it’s in-house mobile banking platform. This is the feature that makes the trade credit product viable for a larger number of retailers.
The project will involve working with 1,200 retailer selling Coke products in and around Nairobi, Kenya. Of these, two thirds will receive the trade credit while one third will serve as a comparison group. While all credits will be repayable to Equity Bank, the distributors of Coke products will be given explicit incentives to ensure repayment for half the retailers to whom the credit is offered. The study will assess the commercial viability of the product, the role of distributors in administering it, and its impact on business development and employment creation. If the intervention is profitable for lenders and borrowers, the project partners are keen to expand the credit product at a much larger scale and to other suppliers.
There are still very few studies on the effectiveness of sexual education programs in transferring knowledge about safe behaviors. More importantly, previous research has highlighted a weak relation between the transferring of knowledge, and real changes on the perception of sexuality and sexual behavior (Kirby, 2006). Maximizing these links, and thus creating an effective sexual education curriculum is of great importance, especially when targeting adolescents. In Colombia, Profamilia's ENDS 2005, (Encuesta Nacional de Demografia y Salud) estimates that 18.5% of the girls between the age of 13-19 are already mothers, are pregnant or have already been pregnant once. Most of these pregnancies translate in school dropouts and a radical, and mostly unplanned, change of life for an adolescent girl.
Traditional sexual education programs are expensive and therefore hard to scale up. The large majority of the existing programs are traditional frontal lectures by professors or health specialists. This makes it very difficult to guarantee the implementation of a basic sexual education curriculum in an educational system characterized almost everywhere by lack of resources.
In the last years, many examples have appeared in North America of programs that have tried to use the internet and other Information and Communication Technologies (ICTs) as an instrument for improving access to sexual education and information. Profamilia - a Colombian non-profit, specialized in the provision of sexual and reproductive health services, has recently decided to invest on internet education to scale up its educational services.
IPA is partnering with Profamilia and GRADE to measure the impact of providing public school students in Colombia with access to 5 modules of Profamilia's sexual education curriculum. The question is whether the internet modules are an effective tool to improve knowledge, and sponsor medium term behavioral change among Colombian high school students who have direct access to the course, as well as whether this has any effect on their peers.
It is widely held that access to information is a vital component of democracy building and government accountability. A recent World Bank report champions information as “a tool to empower citizens in developing countries to hold their public agents accountable.” Information flows, the report argues, not only enhance democratic participation, but also make democracy work for ordinary people. However, while evidence suggests that access to information may lead voters to punish corrupt incumbents, it is unclear whether this translates into increased support for challengers and higher political participation. In other words, information about corruption may not improve political accountability, if voters respond to it by withdrawing from the political process.
Despite optimistic views about fiscal decentralization in Mexico, local governments’ performance has remained poor. In 2008, for example, more than 80 percent of municipal governments’ resources were spent either on the bureaucracy or were unaccounted for. While elections should enable voters to discipline their mayors, a single-term limit is imposed on all elected officials in Mexico. Thus, the immediate fate of mayors is determined not by voters but by their political party. To reconcile the single-term limit with accountability, scholars have typically assumed that voters punish or reward the incumbent party for mayoral performance. However, there is little evidence that government performance impacts the subsequent election – previous work shows a strong entrenchment of incumbents from all political parties.
Further impeding voters’ ability to hold mayors accountable are widespread misconceptions about which public works and services municipal authorities are responsible for providing, as well as a lack of available information about the amount of money municipalities receive and how this money is spent. In an attempt to ensure greater municipal accountability, a 1999 constitutional reform established the Federal Auditor's Office (ASF). On a yearly basis, the ASF selects a sample of municipalities in each state to audit. The results of the audits are published in lengthy reports, which are made available online. Though public, these reports are rarely used by media or political parties in local campaigns because the release date of the reports is not aligned with the timing of elections.
Description of Intervention:
Researchers sought to assess the effects of information dissemination on participation in the 2009 municipal and congressional elections in Mexico. Approximately one week before Election Day, flyers with different kinds of information on municipal spending were delivered to all households within the boundaries of treated voting precincts. The first group of precincts received information about municipalities' overall spending; the second group received information about distribution of resources to the poor; and the third group received information about irregular, unauthorized, or unaccounted for spending. All flyers included a subtle advocacy message suggesting that voters raise questions with their mayors about the use of public funds and prompted people to think about the level of governments that was in charge of the provision of public infrastructure services. In total, 150 electoral precincts were randomly assigned to each of the three interventions, for a total of 450 treated precincts and 1910 precincts in the comparison group.
Researchers gathered demographic characteristics from census data, and then collected electoral results for each precinct from the electoral institutes for each state. This information was complemented by a follow-up survey collected ten days after the election.
Information about overall spending: Disseminating information about overall spending levels had no statistical impact on voter turnout when the mayor spent less than 75 percent of available funds. However, it decreased the incumbent vote share by 0.6 percentage points. When mayors spent more than 75 percent of the funds, releasing this information let to an increase in turnout of 1.9 percentage points, but had no significant impact on vote share.
Information about spending on poor: Turnout among voters who received information about levels of spending allocated to poor areas increased by 2.4 percentage points, but only when mayors spent less than 75 percent of available funds on poor areas. Surprisingly, releasing this information had a similar impact on both incumbent and challengers' vote shares - an increase of 1.5 and 1 percentage points, respectively. When mayors allocated more than 75 percent of resources to poor areas, releasing the information had no impact on turnout or vote share.
Information about corruption: Information about high levels of corruption appears to have had a significant negative impact on voter turnover. Turnout among individuals that received information about corruption decreased by 1.10 percentage points, which represents a 2 percent decrease in turnout. While the effect of information about corruption on the incumbent vote share was insignificant, the effect on the challengers' vote share was negative. These results suggest that while flows of information are necessary, they may be insufficient to improve political accountability, since voters may respond to information by withdrawing from the political process.
 Khemani, Stuti. 2007. Can Information Campaigns Overcome Political Obstacles to Serving the Poor? The Politics of Service Delivery in Democracies. http://siteresources.worldbank.org/DEC/Resources/Khemani_CanInformationCampaignsOvercome.pdf.
Microcredit is often offered in conjunction with client education services, to provide training for clients through the existing infrastructure. Karlan and Valdivia (2008) found that business training for microfinance clients improved business knowledge, practices and revenues for beneficiaries and increased repayment and client retention rates for the institution. Financial literacy is another educational topic that may be effective in improving economic conditions of clients and financial conditions for lenders. By offering financial trainings with credit, microfinance institutions may help clients to better manage their loan repayment and avoid overindebtedness. Microfinance institutions may minimize educational costs and improve outreach of the model by using information and communication technologies (ICTs) such as radio and television.
Context of Evaluation:
Arariwa is a NGO based in Cusco, Peru which serves much of Southern Peru. Arariwa offers livelihood trainings, technical skill development, and microfinance products to clients in these areas. To offer microfinance, Arariwa establishes communal banks that participate in group savings, loans, and educational programs. In an effort to improve client success, Arariwa is utilizing its existing infrastructure to provide financial education.
Description of Intervention:
A total of 666 communal banks were randomly assigned to a treatment group, which received a financial education module, or a comparison group which received education on other topics such as health and self-esteem.
The financial literacy program consisted of nine monthly training sessions that used both video and radio components to convey lessons. The sessions, provided during monthly bank meetings, were based off a curriculum adapted from Freedom from Hunger’s (FFH) training modules, and also used short videos (5-7 minutes in length), activities, and moments of reflection to reinforce key concepts. . Training sessions lasted 45-minutes and covered the following topics: creating financial goals and savings plans, investing in business, calculating loan payments, and avoiding default. After meetings, participants were asked to listen to a 25-minute radio program to reinforce the training content and to complete a set of homework questions. The radio program was broadcast four times a month and presented testimonies from successful Arariwa clients.
Results and Policy Lessons:
Low implementation levels led a discontinuation of the evaluation. After 11 months, only one percent of the communal banks in the treatment group had completed the full training program. Problems faced by the implementer included: little preparation of credit officers to assume facilitation, low attendance levels at training sessions, and delinquency crises requiring credit officers to focus most of the meeting on collecting repayments. ICTs used as complements to the training presented very limited take-up and usage. The video component was often difficult to broadcast during meetings due to challenges in obtaining TV sets and DVD players in rural communities and as a result the median bank only trained with the DVD one time. Less than seven percent of the members in the treatment group listened regularly to the radio program, despite a set of incentives connected to the program.
Children in post-conflict environments are a population of particular concern, exposed to violence, displacement, and death of family members. The impact of poverty means that child labor is common among children. Though no reliable data exists, indications are strong that sexual abuse and exploitation is a fact of life for many girls and teenage pregnancy has been identified as a child protection concern. In addition to the physical and mental health challenges posed by war experiences, these children remain susceptible to continued exploitation and abuse, often by those familiar to the child, during peace as refugees return home and community members cope with difficult pasts.
Context of the Evaluation:
The situation of children in Sierra Leone continues to be precarious as 27% of the 2.7 million children are identified as vulnerable, lacking the protection of a primary care giver. Formal structures for child protection exist within police stations and local Child Welfare Committees (CWCs), but capacity and community trust in such institutions’ efficacy are limited in many rural areas. To reduce violence against children, existing social structures,most paramount, section, and village chiefs, are frequently leveraged to respond to reports of abuse and to mobilize local protective factors.
To respond to the resource constraints faced by formal child protection systems in Sierra Leone, the Ministry of Social Welfare, Gender, and Children’s’ Affairs (MSWGCA) is experimenting with a policy framework that explicitly links local chiefs and community members to the formal child protection sector. This policy was articulated in a Memorandum of Understanding (MOU) signed in 2010 by the MSWGCA, CWCs, and the Council of Paramount Chiefs. The MOU and focal person system are currently being implemented in Moyamba and Pujehun districts, with potential to expand the program nationwide. The MOU creates a framework through which chiefs, MSWGCA, CWCs, and the Family Support Unit (FSU) of the Sierra Leone Police can collaborate to protect children. Village chiefs appoint a focal person for child welfare in a public meeting of village residents. Focal persons report cases of child abuse to chiefs and chiefs, with the assistance of focal persons, follow up with the formal child protection actors to ensure that cases of child abuse are addressed appropriately.
To help focal persons connect informal systems for child protection to the formal roles of the FSU and MSWGCA, UNICEF and other local child protection NGOs have developed a training program that introduces focal persons to general approaches to child protection, as well as to their roles and responsibilities under the MOU. Despite the grounding of these trainings in both international best practices and local norms and understandings, key stakeholders have expressed concerns about whether one-time trainings will provide focal points with sufficient capacity to effectively serve as a link between communities, chiefs, and formal child protection systems. At the same time, repeated trainings or sustained in-depth monitoring by international or national child protection agencies is not sustainable in the context of rural villages in Sierra Leone.
Details of the Intervention:
Mobile phones and SMS messaging provide one potential avenue for bridging the gap between the need for sustained support of focal points and the high costs of transportation in rural Sierra Leone. To leverage the growing use of this technology in Sierra Leone, a consortium of non-profit, academic, government, and private-sector stakeholders have collaborated in developing the Child Protection Knowledge and Information Network (CPKIN). CPKIN (pronounced as “See Pikin” or “See the Child” in Krio, a language spoken throughout the country) is a system that will be used to send focal persons automated text messages asking questions about the welfare of children in their village and prompting them to engage in discussions in their community to help answer these questions. Focal persons will then be encouraged to send their answers back to the central CPKIN system using a free text message. These text message questions and responses will be sent and received through a software program that makes it possible to manage, organize, and analyze high volumes of outgoing and incoming messages with a large list of recipients
There are several hypotheses underpinning the design of the CPKIN program. The first hypothesis is that the process of receiving questions, discussing the questions with community members, and sending answers will encourage focal persons to critically examine the situation of children in their communities and then to act with the resources available in their villages. A second hypothesis is that having a focal person who is active with respect to reporting abuses, taking proactive steps to improve the welfare of children, and engaging community members in discussions regarding children has the potential to cause dramatic shifts in community level knowledge, norms, and practices regarding child protection, which in turn may lead to greater connections between informal and formal child protection systems.
Given the novelty of the CPKIN system as a child protection intervention, it is necessary to assess the extent to which sending regular, open-ended text messages to village focal persons using this system can increase the capacity of focal points and their communities to proactively and reactively respond to local child protection issues. In particular, the effectiveness of CPKIN and the validity of the underlying hypotheses will be evaluated using a randomized evaluation in 140 villages in Moyamba and Pujehun districts. The randomization will occur at the village level, with the 70 villages randomly assigned to the CPKIN treatment, and the remaining 70 villages comprising the comparison group, in which there is no intervention. In treatment villages, the village focal person will receive a one-on-one training on the overall aims of CPKIN, how to receive and send CPKIN messages, and how to use CPKIN as a starting point for engaging their community members on issues concerning child protection. Shortly after this training, focal persons will begin receiving regular CPKIN prompts.
Baseline and endline surveys regarding child protection and child welfare will be conducted before and after the six to eight month intervention in all 140 villages in order to assess the relative effectiveness of the CPKIN support system, with survey questions designed to elicit two kinds of information:
1.) The capacity of key stakeholders (children, parents, focal persons, chiefs, FSU, and CWCs—where they exist) to identify and respond to child protection issues.
2.) The protection and support for children within their communities, and their overall level of welfare (including the prevalence of both abuses and protective factors).
Programs designed to alleviate poverty often focus on delivering goods or services (e.g. productive assets, training, bed nets, etc.) or capital conditional on certain outcomes to poor households. While these types of programs may be effective in achieving specific goals, they do not provide poor households with the choice and flexibility of allocating resources to meet the needs they find most pressing. An alternative approach to delivering support in kind is to simply give money to poor households. However, this approach is sometimes received with skepticism, as there is no guarantee that money will be spent to achieve the specific impacts that donors desire. This evaluation will study what happens when poor families are given cash without any stipulations.
Context of the Evaluation:
This study takes place in Kenya, a country at the forefront of the mobile money revolution. Since the launch of M-PESA, a mobile-phone based transfer service, in 2007, Kenya has become the country with most extensive retail payment network. GiveDirectly is a non-profit organization that leverages the low costs of mobile money to deliver cash transfers to poor households, reducing the cost of delivery to only 10 percent of each donated dollar. Beneficiaries receive donated money on their SIM cards and can visit a local M-PESA agent to exchange the mobile credit for cash.
Description of the Intervention:
Households are eligible for the unconditional cash transfer program if they have homes constructed entirely from non-solid materials (mud, grass, etc). GiveDirectly has identified 1,250 eligible households in the Rarieda district of Kenya. Study villages in this district are randomly assigned to a treatment or pure comparison group. Within treatment villages, 500 eligible households are then randomly assigned to receive unconditional cash transfers. These households will then be compared to 500 control households in the same villages, which do not receive transfers. In addition, the 500 control households will be compared with 250 households in pure comparison villages to identify any spillover effects of the intervention. All study households receive a baseline survey before randomization.
Households receiving the cash transfers are randomly chosen to either receive a single lump sum transfer of 25,200 KSH (about USD 280), or monthly transfers for nine months with the same total value. In addition, to assess whether household expenses differ when money is transferred to the head male or female of the family, the gender of the transfer recipient is randomly selected.
Money is transferred to beneficiaries using Safaricom’s M-PESA mobile payment system—sending money from the GiveDirectly account to the recipients’ SIM cards. Recipients, who are required to register with M-PESA, receive a text message when funds are transferred and can then visit a local M-PESA agent to transfer mobile credit to the agent’s phone in exchange for cash. Most households in the sample are within a 30-45 minute walking distance to an M-PESA agent. Households in the program without mobile phones are given SIM cards to allow them to redeem money. A follow-up survey one year after the first transfers will collect data on income sources, investment, consumption, food security, school enrollment of children, and mental and physical health. These surveys will be complemented by the collection of salivary cortisol levels to measure the impact of unconditional cash transfers on stress.
Results and Policy Lessons:
For additional information, view GiveDirectly’s Evidence page.
Without a system for managing finances, small businesses may miss opportunities to increase profits and trim expenses. In particular, entrepreneurs in developing countries who rely on informal businesses to meet basic consumption needs may benefit from formal record keeping systems. Many of these entrepreneurs, often with little formal education and low levels of financial literacy, do not maintain records of business expenses or sales. Providing small business owners with tools to manage their finances may be a way to improve both business outcomes and household consumption levels.
For additional information on current SME Initiative projects, click here.
Context of the Evaluation:
Colombia has an estimated 400,000 micro and small stores or "tiendas”. In Colombia, these retailers comprise 52% of food and retail sales. While tienda entrepreneurs sell hundreds of different products, and have managed to keep contact with wholesalers, most continue to use unsophisticated business administration tools (writing down sales and purchases on notebooks) or none at all. Colombia also has one of the most penetrated information communication and technology (ICTs) markets: there are 92.3 cell phone subscriptions per 100 people, and 45.5% of the population uses the internet.
Frogtek, a firm specialized in creating business tools for entrepreneurs in emerging markets, identified that a major challenge for micro-retailers was managing their perishable inventories and figuring out how often they would need to restock them. While several non-governmental programs have tried to address these issues through financial education and literacy training programs, shopkeepers continue to use unsophisticated methods, or none, and cannot easily determine the size of their inventory or actual profits.
Description of Intervention:
To address these challenges, Frogtek created “Tiendatek”, a smart phone application to help shopkeepers systematize their business by managing their accounting, inventories, sales, payments to suppliers, expenses and earnings. The tool is distributed through personal sales associates who visit the shopkeepers, demonstrate the product, and provide training on its use during the length of the pilot. All data generated by the shopkeeper is uploaded and stored on a Frogtek web server. Additionally the Tiendatek application creates simple and advance reports on sales, purchases, credit, inventory, and break-even points based on the data uploaded by the user.
This study pilot targeted clients of a microfinance institution, Bancamía, who are shopkeepers with sales of about 4.5 million COP (about 2500 USD) a month. Frogtek staff interviewed the candidates, assessed their interest, delivered the phone and provided training in one or two visits. Fifty participants were selected to receive a baseline survey approximately ten to twenty days after receiving the new phone and an endline survey, eight to ten months after the initial phone delivery. Shopkeepers participating in the pilot received a phone, charger, SIM card with data access, and a TiendaTek manual free of charge. Those shopkeepers who become frequent users of the application by the end of the study, will be able to keep the phone and receive a three month data plan. By collecting data on the use of the application, store production, sales, satisfaction, and perceived improvements, this comparative study will assess the use of Tiendatek, possibly for further analysis in a randomized evaluation.
Results and Policy Lessons:
Diaz, Alejandro, Jorge Lacayo, and Luis Salcedo. 2007. ”Selling to ‘mom-and-pop’ stores in emerging markets” The McKinsey Quarterly,
De Jacobs, Alicia. “Colombia Retail Food Sector” USDA Foreign Agricultural Services Global Agricultural Information Network Report, October 2010.
United Nations Conference on Trade and Development 2010 Information Economy Report