Can Mobile Money Induce Financial and Entrepreneurial Behaviors of Members of Village Savings and Loan Associations in Rural Malawi?

Participants in VSLAs will be trained on how to use mobile money services to conduct business transactions and other aspects of financial literacy. The training will therefore aim at giving the participants 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 be reminding the participants about the important contents of the training they have undergone. The two interventions (training and SMSs) will be promoted as a package because other trials have shown that training alone does not lead to significant outcomes but when combined with SMSs that remind the participants to save. The experiment will therefore have two study groups:
i) the control arm will receive no intervention;
ii) the treatment arm will receive face to face training on use of mobile money services for business. These will also be sent reminders on the use of SMSs.

Both the treatment group and control group members will be participants in VSLAs such that 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.een the treatment group and the control group.

2018-11-01

2019-04-30

Proportion of VSLA members that use mobile money for business purposes
Level of savings measured as percentage

Proportion of VSLA members with a bank account,
Level of capital injected into business
Demand for credit measured as loans that have been obtained

The field experiment will use a cluster randomization design. Clusters will be defined as group village headman's area which are comprised of three to four VSLAs. Some group village headmen will be randomly assigned to the treatment group while others will be assigned to the control group. All VSLAs in the treatment group will be selected and all members will be requested to participate.

The field experiment will use a cluster randomization design. Clusters will be defined as group village headman's area which are comprised of three to four VSLAs. Some group village headmen will be randomly assigned to the treatment group while others will be assigned to the control group. All VSLAs in the treatment group will be selected and all members will be requested to participate.

We used Optimal Design Software to estimate sample size. We based our power calculations on our main outcome variables; savings and usage of mobile money. Other similar studies (see Abebe et al; 2016, Karlan et al., 2014), using almost similar outcome variables and study timeline, have found impact rate of up to 42%. We therefore assume a modest impact rate of 40%. With regard to Intra-Cluster Correlation (ICC) there are two ways of estimating the ICC. On the one hand, ICC of a given variable is typically determined by looking at pilot or baseline data for your population of interest. On the other hand should you not have the baseline data. Another way of estimating the ICC is to look at other studies examining similar outcomes and justify your choice from them. Similar studies in similar contexts have used ICC of between 0.04 and 0.05(see Abebe et al., 2016 & Ksoll et al., 2014). We therefore assume that ICC is 0.04. Using these parameters we have established that we will have a sample size of about 1008 individuals (i.e. 504 individuals per arm) (see figure 1). This implies that we will have about 4 group village headmen’s areas per arm. Literature (see Ksoll et al., 2014 & Karlan et al., 2014) has shown that there are about 18 members per VSLA. Bearing in mind chances of attrition, noncompliance and contamination, we adjust the 864 sample size accordingly. Assuming attrition rate of 3% (see Ksoll et al., 2014) and noncompliance of 25 % (see Ksoll et al., 2014) the sample size increases to about 1290 individuals. This will result in power of about 80%.

Randomisation will be done in office on a computer with representatives of Emmanuel International in attendance.

Group village headman (cluster)

Yes

48 group village headmen (clusters). 24 group village headmen will be in the treatment group and 24 group village headmen will be in the control group.

3686 individuals that are members of VSLAs

Participants from 24 group village headmen will not receive any intervention (control) and Participants from 24 group village headmen will receive training in use of mobile money and SMSs to remind them of the training content.

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.