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Field
Abstract
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Before
Over 70% of Malawians living in rural areas are excluded from the formal financial sector, which has led to a drive in government’s efforts towards increasing financial inclusion through expansion of digital payment systems, leverage Village Savings and Loan Associations (VSLAs) to increase savings, and effective consumer empowerment and education, amongst others. Studies have shown that participation in VSLAs improve business outcomes as well as financial inclusion. It is also stated that digital payments have the potential to increase money circulation, making capital available where most needed. We therefore hypothesize that use digital payments in the form of mobile money in VSLAs will lead to more financial inclusion and better business outcomes. The project thus, proposes to implement a cluster randomized control trial to test the effects of the promotion of the use mobile money plus reminder short messages services (SMSs) 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 assist in evaluating it and development of the successor strategy.
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After
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.
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Field
Last Published
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Before
September 03, 2018 08:54 PM
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After
October 19, 2018 06:49 AM
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Field
Intervention (Public)
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Before
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.
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After
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.
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Field
Experimental Design (Public)
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Before
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.
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After
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.
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Field
Planned Number of Clusters
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Before
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.
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After
42 group village headmen (clusters).
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Field
Planned Number of Observations
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Before
3686 individuals that are members of VSLAs
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After
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
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Field
Sample size (or number of clusters) by treatment arms
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Before
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.
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After
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.
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