Despite the rapid global expansion of mobile phone coverage, many isolated, rural communities do not have connectivity. In the Philippines, researchers are evaluating the impact of installing cellular towers and providing free SIM cards for mobile phone use on communication activity and frequency, social ties, access to information, migration and labor market outcomes, bargaining power and market prices, and income and employment decisions.
Limited knowledge of financial concepts is associated with suboptimal financial behavior such as low rate of formal savings, poor usage of bank accounts, amongst others. Well-designed financial education programs have the potential to improve financial knowledge and behavior, leading to improvements in wellbeing.
Recent evidence has demonstrated the difficulty of stimulating entrepreneurship and reducing poverty through microcredit. In rural Morocco, where microcredit take-up is relatively low, researchers are conducting a randomized evaluation to test the impact of improved microcredit loan design on its take-up, as well as the welfare and business conditions of borrowers.
Many pregnant women face financial barriers to accessing safe delivery services, including high costs associated with transportation to a health facility and materials needed for a safe delivery. In Zambia, researchers are piloting a set of home-based and village savings group interventions focused on empowering pregnant women to save in order to better access their preferred safe delivery services.
Households living in extreme poverty face a wide range of challenges that limit their ability to make productive investments or cope with unpredictable shocks such as droughts or disease. Productive inclusion programs combine cash transfers with trainings and other support to increase household earnings while also helping households withstand and recover from shocks.
Identifying eligible beneficiaries for social programs, a process known as “targeting,” can be a challenging and costly process for development and humanitarian organizations. Many widely-used targeting strategies were developed for rural environments and may not work as well in dynamic and densely populated urban centers. One potential new technique is “decentralized targeting,” a process that relies on information from socially knowledgeable members of a community.
Impact evaluations in the financial inclusion sector often attempt to measure the financial health of their participants. However, there is little consensus about what financial health consists of and how it should be measured, making it difficult to compare findings about financial health across studies. IPA is developing a standardized set of metrics for measuring financial health that can be used in a variety of contexts.
There is a growing body of evidence on the efficacy of SMS reminders to encourage banking clients to save more. Researchers in the Dominican Republic partnered with savings and credit institution Banco Unión to conduct two randomized evaluations of tailored SMS reminders: The first on their ability to influence remittance recipients’ decisions to open savings accounts, and the second on their ability to influence existing account-holders’ decisions to save.
Access to banking services can help households better manage financial decisions. Yet households may not use the services if they do not trust the institutions, if service quality is poor, or if the services disrupt local financial relationships. Researchers examined the impact of access to banking services for the first time on households in rural Kenya.
In countries like India, female labor force participation is low despite rapid economic growth. In partnership with the government of Madhya Pradesh, researchers offered women individual bank accounts to evaluate the impact of increasing women’s financial control on labor market participation and earnings. Linking earnings from a government workfare program to women’s bank accounts led to increased employment both within the program and in the private sector.
In Mexico, as in many other countries, retirement savings levels are low. The situation is worse for informal workers and the unemployed, who cannot rely on employer contributions to help build their nest eggs.
While many low-income Americans have costly debt, they typically spend only a small proportion of their tax rebates to repay those debts. In partnership with Baltimore CASH, researchers are introducing postcards that encourage low-income tax filers to use their tax rebates to pay off debt, and varying the timing of postcard delivery, to evaluate the impact of these nudges on debt repayment.
Commitment savings accounts—which reward users for reaching savings goals and penalize them for withdrawing early—have the potential to help people reach their savings goals, but concern over having enough cash on hand to cover emergencies may discourage some from using them. Changing the design of commitment savings accounts to pay incentive bonuses up front rather than at the end of a defined period may encourage more people to take advantage of them.
Rainfall insurance is a potentially cost-effective way to protect farmers in low-income countries from adverse weather events, but its adoption has been low. Marketing rainfall insurance to farmers’ urban relatives, who often help support their rural family members, may increase its use. Researchers partnered with micro-insurance organization Planet Guarantee to study the demand for a rainfall insurance product marketed to urban relatives of farmers in Burkina Faso.
Credit reports may help low-income borrowers better understand their credit histories and allow them to make better borrowing decisions. However, even when credit report tools are freely available, borrowers rarely check their scores. Awareness campaigns may make credit reports more salient to consumers and in turn increase the use of credit reports in financial decision-making.