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Can Mobile Money Induce Financial and Entrepreneurial Behaviors of Members of Village Savings and Loan Associations in Rural Malawi?
Last registered on October 19, 2018

Pre-Trial

Trial Information
General Information
Title
Can Mobile Money Induce Financial and Entrepreneurial Behaviors of Members of Village Savings and Loan Associations in Rural Malawi?
RCT ID
AEARCTR-0003245
Initial registration date
September 03, 2018
Last updated
October 19, 2018 6:49 AM EDT
Location(s)
Primary Investigator
Affiliation
University of Malawi
Other Primary Investigator(s)
PI Affiliation
University of Malawi
PI Affiliation
University of Malawi
PI Affiliation
University of Malawi
Additional Trial Information
Status
In development
Start date
2018-11-01
End date
2019-04-30
Secondary IDs
Abstract
Over 70% of Malawians living in rural areas are excluded from the formal financial sector. This situation has led to a drive in the government’s efforts towards increasing financial inclusion through the expansion of digital payment systems, the leverage of Village Savings and Loan Associations (VSLAs) to increase savings, the effective empowerment and education of consumers, amongst others. Several studies have shown that participation in VSLAs can improve business outcomes as well as financial inclusion. Recent evidence also points out to the potential of digital payments to increase money circulation, making capital available where most needed. We therefore hypothesize that the usage of digital payments in the form of mobile money in VSLAs will lead to more financial inclusion and better business outcomes. Our project thus, proposes to implement a cluster randomized control trial to test the effects of an intervention that promotes mobile money usage combining the diffusion of information in the field and SMS usage reminders among participants of Village Savings and Loan Associations (VSLAs) on financial inclusion and entrepreneurial outcomes. Primary outcome indicators in the experiment will be the use of mobile money for business purposes and savings. With the current Malawi Financial Sector Development Strategy running to 2020, we expect that the outcomes of this study will provide valuable evidence to inform this strategy and influence its further development.
External Link(s)
Registration Citation
Citation
Cassim, Lucius et al. 2018. "Can Mobile Money Induce Financial and Entrepreneurial Behaviors of Members of Village Savings and Loan Associations in Rural Malawi?." AEA RCT Registry. October 19. https://doi.org/10.1257/rct.3245-2.0.
Former Citation
Cassim, Lucius et al. 2018. "Can Mobile Money Induce Financial and Entrepreneurial Behaviors of Members of Village Savings and Loan Associations in Rural Malawi?." AEA RCT Registry. October 19. https://www.socialscienceregistry.org/trials/3245/history/35945.
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Experimental Details
Interventions
Intervention(s)
VSLAs members in Malawi will be trained on how to use mobile money services to conduct business transactions and other aspects of financial literacy. The training aims at giving the participants basic knowledge and skills on how the mobile money platform can be used for business purposes as well as some elements of financial literacy. The training will be followed by SMSs that will remind the participants about the important contents of the training they have undergone As other studies related to saving behavior in similar contexts have already shown that training alone does not lead to significant outcomes unless it is combined with SMSs that remind the participants to save, the two elements of our intervention (training and SMSs) will be promoted as a package. The experiment will therefore have two treatment branches: i) the control arm, which will not receive the intervention; and ii) the treatment arm, which will receive face to face, field based, training on mobile money services usage for business purposes. Treated individuals will also be sent SMS reminders on the use of mobile money for business transactions. Both the treatment group and control group members will be participants in VSLAs, henceforth the positive impacts of VSLAs on financial inclusion and business outcomes that were established by other studies will be assumed. The project will train each member of the treated group on the use mobile money services for business purposes.
Intervention Start Date
2018-11-01
Intervention End Date
2019-04-30
Primary Outcomes
Primary Outcomes (end points)
Proportion of VSLA members that use mobile money for business purposes
Level of savings measured as percentage
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Proportion of VSLA members with a bank account,
Level of capital injected into business
Demand for credit measured as loans that have been obtained
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
In our intervention context, several VSLAs are grouped together to form a Group Village Headman (VGVH). As required by our partner NGO in the intervention area, all VSLAs within a given GVH must be assigned to the same treatment status (treatment or control); and if a given VSLA is assigned to the treatment group, all its members must be treated. Taking this context into account, we decided to work with a cluster design. To implement this design, we will first randomly chose one VSLA per GVH, and then randomly assign half of these VSLAs to the treatment group and the other half to the control group.
Experimental Design Details
In our intervention context, several villages (six to ten) are grouped together to form a Group Village Headman (GVH). In each of the villages, we will have at least one VSLA. As recommended by our partner NGO in the intervention area, all VSLAs within a given GVH must be assigned to the same treatment status (treatment or control); and if a given VSLA is assigned to the treatment group, all its members must be treated. Taking this context into account, we decided to work with a cluster design. To implement this design, we will first randomly chose one VSLA per GVH, and then randomly assign half of these VSLAs to the treatment group and the other half to the control group. We will base our power calculations considering a binary outcome: usage of mobile money for business transactions. Assuming that usage in the control group will be around 5% (with a 95% CI between 1% and15%) and considering that our project will evaluate usage in the very short term (less than six months after the intervention), we expect our treatment to increase usage by at least 8 percentage points. We also consider that on average we will be able to collect information from 18 individual per cluster (according to our partner NGO, the average VSLA size is 20, and the minimum size is 15). The parameters that have been used to determine the required number of clusters in our design are then as follows: average cluster size = 18; probability of success in the treatment group=13%; probability of success in the control group=5%; and 95% C.I. for usage in the control group between 1% to 15%. With these parameters, it is found that a total of 42 clusters will allow us to detect our expected treatment effect with power of 80%. Considering 42 clusters, the total number of individuals that must be included in the baseline is 756. Taking into account the number of clusters determined in the binary outcome calculations (42), we now estimate the minimum effect that we will be able to detect in the continuous case with power 80%. Two additional assumptions need to be made for this purpose. In first place, we assume that the Inter Cluster Correlation (ICC) is about 0.05; and in second place we assume that the baseline covariates explain fifteen percent of the observed variation in the model (R2=0.15). This analysis shows that we can observe that with power 80% we will be able to detect a minimum effect of 0.27 s.d. (which is higher, but relatively close, to the standard 0.20 s.d. effect generally recommended in the impact evaluation study literature). Finally, we need to adjust the sample for potential individual attrition as well as for potential individual noncompliance, which are expected to be about 3% and 25%, respectively. The resulting sample after these adjustments contains 973 individuals in 42 clusters. This sample size will be attained by interviewing a minimum of 18 individuals per cluster.
Randomization Method
Randomisation will be done in office on a computer with representatives of Emmanuel International in attendance.
Randomization Unit
Group village headman (cluster)
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
42 group village headmen (clusters).
Sample size: planned number of observations
973 individuals that are members of VSLAs. Half of these individuals will be in the treatment group and half will be in the control group
Sample size (or number of clusters) by treatment arms
Participants from 21 group village headmen will not receive any intervention (control) and Participants from 21 group village headmen will receive training in use of mobile money and SMSs to remind them of the training content.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
ICC is assumed at 0.05, minimum detectable effect (difference in proportion of savings to total income) is assumed at 0.20, and R-squared=0.15.
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
PEP Ethics Review Committee
IRB Approval Date
2018-08-21
IRB Approval Number
PIERI-20281
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers