Innovations for Poverty Action hosted a webinar showcasing the latest rigorous evidence on innovations in financial capability and financial services for the poor, featuring presentations by Tarek Ghani (Princeton), José Tessada (PUC Chile), and Marina Dimova (ideas42)
The biggest gaps to achieving financial inclusion in the country/industry in focus:
There are low savings rates around the world, in part due to behavioral biases; for example, people tend to put off until tomorrow what they should be doing today.
People have difficulty deciding how much money they should save for retirement, which contributes to low levels of pension savings.
Most financial literacy training and financial counseling programs that have been tested have not resulted in changes in financial behavior, suggesting that alternative program designs need to be explored.
Key action steps to advance financial inclusion:
Integrate evidence-based solutions to promote positive financial behavior.
In Afghanistan, researchers Joshua Blumenstock, Michael Callen, and Tarek Ghani tested an automatic payroll deduction program with default enrollment and matching incentives to help employees in Afghanistan save.
In Chile, researchers Olga Fuentes, Jeanne Lafortune, Julio Riutort, Jose Tessada, and Felix Villatoro brought personalized information on pension payouts to self-service modules in ChileAtiende offices. Seeing how their savings translated into income in their older years helped low-income people save more.
In India, Marina Dimova alongside her ideas42 team are simplifying the content of financial education programs and delivering them through mobile phones. They are currently testing whether these mobile-based “financial heuristics” help customers of financial services make better decisions.
Quote(s) from the discussion:
“Our ultimate goal is to help clients tell their own story and chart their own destiny.”
–Marina Dimova, ideas42