The vast majority of new HIV infections occur in sub-Saharan Africa, where nearly 2 million people become infected with HIV/AIDS every year. This randomized evaluation examines the impact of two HIV prevention strategies among youth in Kenya: voluntary counseling and testing for HIV (VCT) and condom distribution.

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While primary school enrollment has risen sharply around the world, the quality of education remains low in many countries. Researchers examined whether increasing community oversight and participation could improve education outcomes in Uttar Pradesh, India.

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How do migrants decide how much money to send home in remittances? Would they like to have some control over how much of the money is spent and how much is saved? This study offered a variety of special bank accounts to migrants from El Salvador living in Washington DC, offering the sender varying degrees of control over an account held in the receivers name. Migrants offered greater control sent significantly more.

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In Mexico, the financial intermediary Caja Nacional del Sureste (CNS) observed that it was transferring a large amount of remittances to their clients but that very little savings was captured from this flow of money. Researchers partnered with CNS to investigate whether requiring clients to sign a non-binding agreement to save a predetermined amount of each remittance received could increase saving.

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This research examines whether bank marketing and communication tools can help individuals save more and, in particular, switch from informal savings vehicles to formal sector methods (e.g., a bank account). In conjunction with Caja Municipal de Ica (CMI), IPA examines various methods of product design, beyond the financial incentive, of encouraging clients to complete their savings commitment.

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Village Savings and Loans Association members meet

Village Savings and Loans Associations (VSLAs) are thought to play a critical role in bringing financial services to rural areas of developing countries, where access to formal financial services is typically very limited. However, evidence on the impact of these groups has been sparse. In Ghana, Malawi, and Uganda, Innovations for Poverty Action worked with researchers and CARE to rigorously evaluate the impact of VSLAs on rural households.

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Previous research suggests that many people lack the skills needed to calculate expected returns or present discounted values, which may cause them to make suboptimal financial decisions.  Previous work by Hastings and Tejeda-Ashton in Mexico showed that the way that returns to a pension program were presented (in pesos versus as an annual percentage) affected price sensitivity.  Another explanation offered for sub optimal financial decisions is the present bias of many decision makers, who a

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Credit markets in developing countries can be hampered by a lack of basic financial mechanisms, such as the ability to screen loan applicants to improve repayment rates. Researchers evaluated the effect of (a) simple text message reminders and (b) financial incentives on borrowers' loan repayment. These methods had similarly positive effects, which suggests that the text message reminders may be a more cost-effective intervention.

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An informal savings group meeting

To understand the potential gains from formal banking, we must first understand the risks and returns that the poor face from financial-service options in the informal sector. Yet, while informal financial products dominate the financial lives of the poor, we have scant data and analysis on either informal savings or informal debt.

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Microfinance has generated worldwide enthusiasm as a potential answer to economic development and poverty reduction. But high default risk and unproductive use of loaned funds plagues many programs. Researchers worked in Peru to measure the marginal impact of adding business training to a group lending program. The results of this study found business training slightly improved business practices, but had no impact on key business outcomes such as revenue and profit.

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Poverty, lack of female empowerment, and lack of education are major risk factors for childhood illness worldwide. Microcredit clients randomized to an educational intervention showed greater knowledge about child health, but no differences in child health outcomes compared to controls.

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One of the most famous innovations of microfinance was the idea of “social collateral” – a way to guarantee the loans of people who have limited physical assets. However, it’s not clear that requiring group liability is actually a good thing. For instance, it can drastically raise the cost of a loan for a good client if she is forced to cover for other loans. Furthermore, it can force someone to guarantee people who take out much larger loans, which may prove to be impossible.

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While informal savings groups are common around the developing world, their formats can limit flexibility in responding to members’ needs, particularly when it comes to loans or coping with unexpected expenses. In Mali, Oxfam’s Saving for Change (SfC) program allows groups of women to form a savings group together. Members can also apply for loans from the group, to be paid back with interest. When the group ends, the pool of funds with the loan interest is redistributed to the members.
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IPA is working with Mumuadu Rural Bank (MRB) to study the response to and impact of a new account labeling savings product. Working with Susu customers and Susu agents, the study compares the success of this new product with the current Susu savings product. The new savings product has only a psychological difference: it allows the labeling of funds within an account so that deposits can be directed to a specific goal, such as health, education or business savings.
 
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Over the past decade, many developing countries have expanded primary school access, but improvements in school access and enrollment may not always translate into improved learning outcomes for all students if the quality of education is poor. Researchers evaluated the impact of the Balsakhi Program, a remedial tutoring education intervention implemented in schools in Vadodara and Mumbai, India, on student learning.

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Despite booming economic growth and an improved educational infrastructure in many regions in India, primary education is lagging in many remote and marginalized communities. This study estimated the effect of financial incentives on teacher attendance on students' attendance and math and language levels. The incentives increased teacher attendance and teaching time, and student test scores rose as a result.

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Does linking teachers' pay to students' test performance improve educational outcomes, or just increase “teaching to the test”? This study examines the effects of a teacher incentives program on both teacher behavior and student test scores in Kenya. Student test scores increased significantly during the study period, but evidence suggests that this improvement came through test-preparation sessions outside of normal class hours.

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