Saving for the future tends to be particularly challenging in developing country contexts, where many people lack access to formal saving tools. Researchers partnered with a tea company in Malawi to study the effects of a savings product that allowed workers to defer payment of a part of their wages. The deferred wages program was generally popular and increased savings; in the longer run, it helped workers improve their houses.
Saving for multiple goals at the same time is difficult, especially for individuals without access to formal bank accounts. In Malawi, researchers offered micro-entrepreneurs either single or multiple lockboxes to evaluate the impact of the boxes on savings and other business and financial outcomes. Individuals offered multiple lockboxes saved more than those offered a single lockbox, suggesting that providing lockboxes may be a cost-effective way to promote savings.
In Malawi, local tax compliance levels are low and the collection process is sometimes corrupt. At the same time, people are reluctant to pay taxes until they see material benefits from their taxes, contributing to a vicious cycle of non-payment and poor government service delivery.
Millions of people in developing countries work in the informal sector, due in part to significant barriers to registering one’s business and entering the formal sector. In this study, researchers carried out a randomized evaluation in Malawi, within the context of the World Bank Business Environment Strengthening Technical Assistance Project (BESTAP), to measure the impact of formalization on the business performance of micro-, small and medium enterprises (MSMEs).
Improving access to family planning in Sub-Saharan Africa has the potential to help women and couples achieve their desired family size and avert unintended pregnancies and unwanted births. It may also have longer-term effects by improving women’s health, educational attainment, and socio-economic status. However, little is actually known about the effectiveness of family planning.
Malawi’s public works program is the largest social protection scheme in one of the world’s poorest countries. Although public works programs are widespread, they can be costly, and there is limited evidence of their effectiveness. Researchers worked with Innovations for Poverty Action and the Malawi Social Action Fund to evaluate the program’s effect on food security.
Efficient targeting of public programs is difficult when the costs or benefits to potential recipients are unobservable. This study examined the potential of self-selection to improve allocational efficiency in the context of a program that subsidized tree planting in Malawi.
Especially in developing countries, there is little evidence about the mechanisms through which compensation impacts worker productivity. To examine this relationship, researchers evaluated the effect of randomly offering varied wages to bean-sorting workers in rural Malawi. While offering higher wages caused workers to increase their productivity, it did not attract more productive workers.
With limited income and many demands on their financial resources, it is especially important for poor households in developing countries to allocate their money deliberately across various expenditures. In Malawi, researchers investigated how paying workers in weekly installments versus as a monthly lump sum affected their spending on temptation goods, and if the timing of wage payments changed the impact of the payment structures.
Can fingerprinting borrowers improve repayment rates? For micro-lending to be viable microfinance institutions need to ensure that their clients repay their loans. We worked with the Malawi Rural Finance Corporation (MRFC) to create a more reliable system for identifying and tracking, by fingerprinting borrowers. Fingerprinting improved repayment rates, especially for those borrowers predicted to have the worst repayment rates.
Previous research in Malawi showed that using fingerprints as unique IDs to track credit histories changed the behavior of microfinance borrowers and increased the chance that those who were poor credit risks would repay their loans. This project intended to scale up the previous work by collaborating with many lenders and a centralized credit data repository in Malawi. It faced many challenges: the commercial credit bureaus were not operational, the customized software for collecting finge
Commitment savings products are a useful tool to help individuals with self control problems stick to their financial plans, but they are unnecessarily restrictive for individuals who want to back out of their commitments due to an unanticipated change in income or other household shock. To shed light on the mechanisms behind the failure to adhere to financial plans, researchers carried out a lab-like study in Malawi that mimicked real life choices.
Conditional cash transfers, where money is given to individuals on certain conditions, have been used successfully to incentivize families to send their children to school, to encourage people to get preventive healthcare check-ups, and to change other behaviors. In this study, researchers evaluated if financial incentives could motivate safer sexual behavior.
Individuals face many barriers to saving which can make it difficult to attain future goals or meet unexpected expenses. Researchers introduced one-time cash windfalls to bank account holders in Malawi to determine the impact of defaulting payment of a cash transfer into a savings account and varying the timing of cash transfers on households’ savings and spending decisions.
In developing countries, women are commonly underrepresented in the formal sector. One potential explanation is that a large proportion of these jobs are secured through informal channels, including employee referrals, which may disadvantage women. Innovations for Poverty Action examined how informal job referral systems affect labor market participation for women in Malawi using a randomized evaluation and found that informal referral schemes systematically disadvantaged qualified women.