For the most vulnerable, even small negative shocks can have significant short- and long-term impacts. Few interventions that improve shock-coping are widely available in sub-Saharan Africa. Researchers test whether individual pre- cautionary savings can mitigate a shock-coping behavior with potentially neg- ative spillovers: transactional sex. Sex for money is a common shock-coping behavior in sub-Saharan Africa and is believed to be a leading driver of the HIV/AIDS epidemic. In a field experiment in Kenya, researchers randomly assigned half of 600+ participating, vulnerable women to a savings intervention that consists of opening a mobile banking savings account labeled for emergency expenses and individual goals. The intervention led to an increase in total mobile savings, reductions in transactional sex as a risk-coping response to shocks, and a decrease in symptoms of sexually transmitted infections.

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June 05, 2019
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Financial knowledge is critical for making sound decisions that foster financial health and protect consumers from predation. A widely-used tool for building this capability is financial education. Yet evidence suggests that conventional approaches which teach concepts in classroom-style settings are ineffective and expensive at scale, especially for lower-income users. More recent findings indicate that customizing financial education to the needs, interests, and location of participants may increase impact, though doing so in a cost-effective and scalable way remains challenging. This randomized evaluation of a tablet-based financial education program with mostly female recipients of a conditional cash transfer (CCT) program in Colombia offers evidence for how to design and scale an effective digital-based financial education program. Results indicate that the LISTA Initiative had significant positive impacts on financial knowledge, attitudes, practices, and performance, increasing for poorer, less educated, and more rural populations, with users exhibiting increased financial health over two years later. Critical mechanisms included well-designed content and a social learning component. Yet the longer-term impact on formal financial inclusion was limited, suggesting the possible benefits of combining supply-side solutions with financial education interventions.

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June 01, 2019
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Working with a private bank in Ghana, this study examines the impacts of a commitment savings product designed to help clients taking repeated overdrafts break their debt cycles. Overall, the product significantly increased savings with the bank without increasing overdrafts. However, after accounting for other sources of savings, the study finds that clients with above-median baseline overdraft histories do not accrue new savings during the commitment period. Rather, they draw down other savings to offset the committed amount and take on new debt. In contrast, individuals with below-median overdraft histories significantly increase savings during and after the commitment period.

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April 24, 2019
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Developing country lenders are taking advantage of fintech tools to create fully digital loans on mobile phones. Using administrative and survey data, we study the take up and impacts of one of the most popular digital loan products in the world, M-Shwari in Kenya. While 34% of those eligible for a loan take it, the loan does not substitute for other credit. The loans improve household resilience: households are 6.3 percentage points less likely to forego expenses due to negative shocks. We conclude that while digital loans improve financial access and resilience, they are not a panacea for greater credit market failures.

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February 01, 2019
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Low-income households around the world are particularly vulnerable to shocks, but also the least prepared when a shock hits. The effects of climate change, including floods, droughts, and other weather-related disasters, are adding another layer of risk for already vulnerable households. In this context, it is increasingly important that poor households build resilience—that they strengthen their ability to mitigate, cope, and recover from shocks and stresses without compromising their future welfare. Evidence suggests well-designed financial products and services can play a role in increasing low-income families’ resilience by helping them be prepared for risk, reduce risk, increase investment in the face of risk, and respond when a shock occurs. Yet the role that financial products and services can play in increasing resilience, as well as the most effective design and delivery mechanisms toward that end, is not fully understood. This paper reviews the evidence on financial inclusion and resilience to inform policymakers on effective strategies and makes the call for more research on this timely and relevant topic.

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Brief
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January 14, 2019
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En Colombia, así como en muchos otros países, los trabajadores enfrentan muchas barreras para ahorrar para la jubilación. La situación es mucho peor para los trabajadores informales, que representan alrededor del 65 por ciento de la fuerza laboral total en Colombia. Con el fin de investigar formas de aumentar las contribuciones voluntarias para el retiro, Innovations for Poverty Action en colaboración con Colpensiones, el administrador público del Régimen de Prima Media con Prestación Definida, y el Banco Interamericano de Desarrollo llevará a cabo tres etapas de evaluaciones aleatorias rápidas - RFT (Rapid Fire Testing) que medirán el impacto de los mensajes de texto en los hábitos de ahorro para el retiro. En México, de forma paralela, los investigadores están implementando un estudio similar adaptado al contexto nacional.

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January 08, 2019
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IPA Zambia is pleased to share its Q1-Q3 bulletin from 2018. This bulletin highlights IPA Zambia's participation in research dissemination and conference events, including the Evidence for Impact Symposium and the Third National Food and Nutrition Summit.

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November 19, 2018
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In Rwanda, we have continued our global tradition of rigorous, applicable research by building foundational research capacity and conducting evaluations in areas of pressing national concern. Examples of our work below offer promising insights into everyday issues that affect the lives of the Rwandan poor. 

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October 17, 2018
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In Mexico, we have continued our global tradition of rigorous, applicable research by building foundational research capacity and conducting evaluations in areas of pressing national concern. Examples of our work detailed in this brief promising insights into everyday issues that affect the lives of people in Mexico.

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September 26, 2018
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Limited financial knowledge, skills, and confidence are associated with suboptimal financial behavior such as low rates of saving, limited usage of deposit and transactional accounts, and overindebtedness. The Government of Rwanda, the World Bank Group, and Innovations for Poverty Action (IPA) partnered to conduct a large-scale randomized evaluation that measured the impact of Phase One of the Financial Education through SACCOs program. The evaluation measured and compared the impacts of two program delivery models—autonomous vs. fixed trainer selection—on SACCO members’ financial knowledge, skills, attitudes, and behaviors.

Key Findings

  • SACCO members attended more sessions of the Financial Education through SACCOs when SACCOs had autonomy to choose trainers from the local community (“autonomous selection”).
  • SACCO members in this autonomous selection group showed improvements in financial knowledge, attitudes, and behaviors, including with respect to knowledge of key rules of thumb, attitudes that emphasize saving and responsible borrowing, and having—and strictly adhering to—a written budget and financial plan.
  • They were also more likely to report saving regularly towards financial goals, and to deposit savings in the SACCO.
  • However, when trainer profiles were predetermined and limited to individuals with formal roles at the SACCO (“fixed trainer selection”) these improvements were not observed. No improvements in either group were found on account usage, borrowing behavior, or financial security.
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July 13, 2018

We present findings from a pilot study exploring whether and how existing ties between urban migrants and rural farmers may be used to provide the latter improved access to formal insurance. Urban migrants in Ouagadougou (the capital of Burkina Faso) originating from nearby villages were offered, at the prevailing market price, a rainfall index insurance product that can potentially protect their rural relatives from adverse weather shocks. The product had an uptake of 22% during the two-week subscription window. Uptake rates were higher by 17-22 ppts among urban migrants who were randomly offered an insurance policy that would make pay-outs directly to the intended beneficiary rather than the subscriber. We argue that rainfall index insurance can complement informal risk-sharing networks by mitigating problems of informational asymmetry and self-control issues.

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March 20, 2018
English

Innovations for Poverty Action (IPA) is a research and policy non-profit that discovers and promotes effective solutions to global poverty problems. IPA brings together researchers and decision-makers to design, rigorously evaluate, and refine these solutions and their applications, ensuring that the evidence created is used to improve the lives of the world’s poor. Since our founding in 2002, IPA has worked with over 575 leading academics to conduct over 650 evaluations in 51 countries. Future growth will be concentrated in focus countries, such as Myanmar, where we have local and international staff, established relationships with government, NGOs, and the private sector, and deep knowledge of local issues.

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February 20, 2018

We report results of a randomized control trial in which parents of primary school leavers were encouraged to open a convenient bank account operated over a mobile money platform. A lock savings account (LSA) was randomly promoted to half the treatment group. Treatment boosted account take-up by 25 percentage points. Intent-to-treat estimates show that being offered either account increased savings on the mobile phone. Total financial savings increased by 3-4 times, suggesting access to the mobile bank account crowded in other forms of savings. High school enrollment was 5-6 percentage points higher – representing a one third increase for compliers.

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January 23, 2018
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IPA Zambia is pleased to share its final bulletin from 2017. This bulletin features updates from our Saving for Safe Delivery study and the scale-ups of the food constraints and Catch Up projects. This bulletin also highlights IPA Zambia's dissemination events for the "Making Ghanaian Girls Great!" and "Interpersonal Communication to Encourage Use of Female Condoms in Zambia" studies.

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January 16, 2018
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Bank accounts can provide a secure way for low-income households to build their assets to make large investments or protect themselves against unforeseen expenses. Yet many poor households don’t use formal financial services. In the Dominican Republic, Banco Unión delivers remittances to approximately 400,000 clients who do not have a formal bank account. The bank also created two savings products tailored to the needs of these clients. In partnership with the Inter-American Development Bank (IDB) and Innovations for Poverty Action (IPA), Banco Unión developed SMS message campaigns to try to boost account uptake and usage among its remittance-receiving clientele. Two randomized evaluations found that the messaging campaigns did not increase clients’ use of formal bank accounts, and may have in fact discouraged account holders’ engagement with Banco Unión, as observed through decreased deposit and withdrawal activity and slightly lower balances by the end of the campaigns. There are several possible explanations for this behavior, including a desire for privacy, savings goals that were overly ambitious, or the use of other, unmonitored deposit products.

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November 01, 2017

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