Finance: Research, Policy and Anecdotes

More on financial inclusion

Last week saw the third Finance and Development workshop at the DIW in Berlin. Fascinating programme - as in previous years – this time with an emphasis on financial inclusion and RCTs. There was some overlap with the financial inclusion conference at the IMF in March I reported earlier on, but also some additional insights.  One thing I immediately noticed was the emphasis on non-credit service provision and the use of mobile phone (as delivery channel or as platform for financial services).  We have indeed come a long way since the Year of Microcredit in 2005.


Several papers focused on the effects of financial management training and show that they can work if delivered smartly. Shawn Cole presented evidence on India and Philippines where training was delivered through mobile phones; Sandra Sequeira showed evidence on Mozambique, where financial management training helped female traders somewhat close the productivity gap with male traders as well as the complementarity of financial management training and offering savings services through mobile phones; and Tim Kaiser showed in an experimental setting in Uganda that active learning rather than pure lecture style teaching had more of a positive effect on entrepreneurs.   It is interesting to see that after a lot of research showing ambiguous and inconclusive results on what works (or more often what does not work) and for whom there finally seems to come a wave of research that give us better insights into what works.  And consistent with the three papers mentioned above is a recent metastudy by Tim Kaiser and Lukas Menkhoff  showing that teachable moments are critical .


An expanding literature has shown that expanding access to formal savings accounts can increase investment by micro-entrepreneurs.  Lore Vandewalle showed for an experimental setting in India that savings accounts help wage earners to smooth consumption though she did not find any  effect on overall income.    Finally, and while not an academic paper, Dorothe Singer’s (full disclosure: I was her PhD supervisor in Tilburg) presentation was one of the highlights for me as she shared with us the findings of the latest Global Findex.  The survey results indicate that in 2017 69% of adults across the globe had an account (up from 62% in 2011), with an increasing role of mobile money account.  I will write more about this in late June, when the project’s lead economist Leora Klapper will present the findings here in London