Open Request for Proposals

Consumer Protection Research Initiative

Deadline for Submissions: February 26, 2021
Focus Countries: Bangladesh, Kenya, Nigeria, Uganda1
Focus Financial Services: Deposit accounts, loans, payment services

Our Request for Proposals is now closed. Thank you to all who submitted applications. Awards will be announced on or around April 1, 2021. Future funding rounds will be announced via our consumer protection mailing list, so please sign up here to receive those updates.
 

1 Consideration may be given to strong, highly relevant proposals from other emerging markets in Africa and South or East Asia with a significant digital financial services market.
 


Information Sessions on February 10 & 11, 2021


To help researchers prepare proposals for the February 26th deadline, we hosted two identical Question & Answer sessions on Wednesday, February 10th at 6:00AM Eastern Standard Time for those in Africa, Asia, and Europe, and Thursday, February 11th at 2:00PM Eastern Standard Time for those in the United States. At these sessions, we also shared highlights from IPA’s consumer protection surveys in Kenya, Nigeria, and Uganda. Data for the Kenya survey is available here, and data for the Uganda survey is available here. These surveys dive deep into the key challenges consumers face with digital financial services in each of these markets, and should help to inform your research proposals as they cover topics such as fraud, complaints handling, agent conduct, pricing transparency, and digital credit.

To view the recording from these sessions, please visit the event page on our website.

Overview

 


Consumer Protection for Financial Inclusion in Low and Middle Income Countries: Bridging Regulator and Academic Perspectives


Markets for consumer financial services are growing rapidly in low and middle income countries and being transformed by digital technologies and platforms. With growth and change come concerns about protecting consumers from firm exploitation due to imperfect information and contracting as well as from their own decision-making limitations. This working paper outlines key areas for future research on consumer protection for financial inclusion in low and middle income countries. Please refer to this working paper when crafting your research proposal.


IPA’s Consumer Protection Research Initiative is a four-year research initiative which partners with policymakers, financial institutions, and civil society to develop new consumer protection solutions in digital financial services. The Initiative focuses on key consumer protection themes relevant to digital financial services.

  1. Fraud in digital channels. Digital financial services have created new opportunities for fraudsters to take advantage of consumers such as phishing messages and call center impersonation. Lost money from fraud can erode consumer trust and cause consumers harm. IPA seeks to identify and measure emerging fraud risks, then test solutions to help consumers and providers reduce the likelihood of fraud in digital financial services.
  2. Consumer redress and complaints handling. In emerging markets, many lower-income consumers struggle to obtain effective resolution of problems. To improve the complaints and redress experience for low-income consumers, we will develop and test solutions (i) to increase use of complaints channels and (ii) to improve effectiveness of redress for consumers suffering harm or abuse.
  3. Product information and consumer choice. Well-timed, relevant, and clear product information can help consumers to be better informed and make more suitable and cost-effective choices with their financial services. Digital channels create new opportunities to provide timely product information and advice to consumers. We will develop and test new methods for providing consumers with information on products available in the marketplace, and to facilitate easier comparison shopping and improved consumer outcomes.
  4. Overindebtedness. Credit can be a boon if utilized for productive uses or responsible consumption smoothing. However, credit can also lead to negative outcomes for borrowers if not managed appropriately. There is a lack of robust evidence on how the risks of overindebtedness can be identified and minimized. This initiative will leverage data analysis and experimental interventions to test new solutions to reduce the risks of overindebtedness.

The Consumer Protection Research Initiative will accept proposals for full and pilot projects which use randomized controlled trial evaluation to assess the impact of a consumer protection intervention or market monitoring tool. Partners will test consumer protection solutions and rigorously measure their impacts to better understand what works in consumer protection and inform global good practices.

Where organizations or researchers are interested in participating in this research initiative but are in need of a research or implementation partner, IPA’s Consumer Protection Research Initiative is available to facilitate connections. Please contact financialinclusion@poverty-action.org.

Minimum criteria for proposals
  1. Proposals should be for research in at least one of the four Focus Countries referenced above, or another leading digital financial services market.
  2. Each application must be presented by a team consisting of one or more researchers involved in the design of the intervention and responsible for carrying out a rigorous evaluation of the program. At least one member of the research team must be affiliated with a research institution or a university and either hold a PhD or be a current PhD candidate in a relevant social science or engineering discipline, such as economics, statistics, sociology, anthropology, psychology, public health, education, or computer science. They must demonstrate experience in field research and randomized trials. Special consideration will be given to research teams with researchers from low- and middle-income countries.

Process and Timeline


The selection process will be led by a Review Committee of IPA staff and researchers with experience in financial consumer protection.


The estimated timeline for the selection is as follows:

  • Open RFP: January 15, 2021
  • Information session and question and answer: February 11, 2021
  • Deadline for questions regarding RFP: February 13, 2021
  • Deadline for submissions: February 26, 2021
  • Awards announced: April 1, 2021

Please note that all funded activities need to be completed before the end of October, 2023.

Maximum award amount per project: $300,000* for full proposal, $50,000* for pilot proposal

*Institution overhead expenses may not exceed 15% of the funding request.

The following criteria will guide the selection of projects to receive funding from this initiative:

  1. Relevance to financial consumer protection and contribution to the field
    1. Does the study address the priorities described in the review paper “Consumer Protection for Financial Inclusion in Low and Middle Income Countries: Bridging Regulator and Academic Perspectives”?
    2. Does the study make a new contribution to consumer protection policy and practice?
    3. Does the research address consumer protection issues faced by base-of-pyramid consumers? Special consideration will be given to studies with a focus on women and other vulnerable groups.
  2. Technical design
    1. Does the research design appropriately answer the questions outlined in the proposal?
    2. Are there threats that could compromise the validity of results? If so, does the proposal sufficiently address those threats?
    3. Are there sufficiently detailed power calculations?
  3. Project viability
    1. Is the relationship with the implementing partner strong and likely to endure through the entire study?
    2. Are there any logistical or political obstacles that might threaten the completion of the study, for example, government authorization or Human Subjects review?
    3. Does the research team have a track record of implementing successful projects like the one being proposed?
  4. Academic contribution
    1. Does this study make a significant contribution toward advancing knowledge in the field?
    2. Does this study answer new questions or introduce novel methods, measures, or interventions?
    3. Does the research strategy provide a bridge between a practical experiment and underlying economic theories?
  5. Local relevance
    1. Does the proposal engage local researchers and relevant local organizations?
    2. Is the research of high relevance to the consumer protection needs and priorities of local decision-makers?
  6. Value for money
    1. Is the cost of the study commensurate with the value of expected contributions to science and policy? Does the study leverage funding from other sources?

Application Materials


You can download the application forms below, and submit your application by February 26, 2021 to financialinclusion@poverty-action.org:
 

Projects are encouraged but not required to partner with the local IPA Country Office, as these offices have the experience and long-term presence to ensure that projects meet excellent research quality standards, maintain strong partner relationships, and that the study is well integrated with the work of the Consumer Protection Research Initiative and IPA, as a whole. Where applicable, please do get in touch with the relevant Country Representative (listed below) as well as Rafe Mazer (Project Director, Consumer Protection) as soon as possible to discuss and prepare your proposal.

Where IPA offices are engaged in the proposal, budgets must be approved by the corresponding IPA country office before submission. IPA offices can support applicants in research design, engagement with potential partner organizations, and preparation of budget materials.

Driving Research Questions


The list below illustrates the types of questions the Consumer Protection Research Initiative is hoping to address through this call. However, it is not an exhaustive list, and any technically sound and policy-relevant project that addresses the key consumer risks listed above will be considered.

Disclosure, transparency and consumer choice
  • What approaches to disclosure and transparency can better inform consumers about fees and pricing, or address the hidden and high prices consumers sometimes pay for financial services?
  • Can interventions which seek to improve competition and choice, such as price comparison tools, actually improve consumer outcomes, and what makes them more likely to be effective?
  • What are the consumer effects of product restrictions such as prohibitions on secondary or add-on features of financial services?
Overindebtedness
  • How can overindebtedness and consumer well-being be measured via outcome metrics?
  • Are there specific decision failures or market failures which impact borrowing decisions that are connected to overindebtedness?
  • What positive or negative role does financial advice play in current decision and market failures, and how could they be improved upon to produce better outcomes?
Consumer redress
  • How can access and use of complaints and redress systems be improved upon for lower-income or new financial consumers? What role do new technologies play in these solutions?
  • What are the causal impacts of new redress systems on provider behavior, dispute resolution, trust in financial institutions, use of financial services, and general consumer welfare?
  • Can new institutional arrangements for consumer redress such as civil society agencies or ombudspersons improve upon consumer redress use and outcomes?
Fraud
  • How can agent conduct issues such as extra fees or discrimination by gender be remedied?
  • Can new data analysis tools or channels—such as social media—help to identify and address fraudulent products and services in digital finance, or likely internal fraud by staff or agents?
  • How can content be designed to improve trust in trustworthy actors and increase wariness of untrustworthy ones?

Questions?


IPA’s Consumer Protection Research Initiative team is available to help interested applicants as they prepare their proposal. IPA staff can help in the following areas:
 

  1. Review of research concepts and recommendations of relevant existing research or researchers.
  2. Connections or recommendations of potential partners in the research countries where appropriate.
  3. Clarifications on the RFP guidelines and the Initiative’s priorities.

Contact the team with any questions.