Financial Inclusion through a Public-Private Partnership: Evidence from Ingreso Solidario in Colombia

Last registered on March 25, 2022

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Pre-Trial

Trial Information

General Information

Title

Financial Inclusion through a Public-Private Partnership: Evidence from Ingreso Solidario in Colombia

RCT ID

AEARCTR-0007755

Initial registration date

June 01, 2021

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

June 02, 2021, 10:41 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated

March 25, 2022, 1:38 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

Colombia

Region

Latin America

Primary Investigator

Name

Bridget Hoffmann

Affiliation

Inter-American Development Bank

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Other Primary Investigator(s)

PI Name

Diego Vera Cossio

PI Affiliation

Inter-American Development Bank

Contact Investigator

PI Name

Camilo Pecha Garzon

PI Affiliation

Department of National Planning Colombia

Contact Investigator

Additional Trial Information

Status

On going

Start date

2021-05-24

End date

2022-12-31

Keywords

Finance & Microfinance

Additional Keywords

Financial Inclusion, FinTech, Cash Transfer, Financial Literacy, Digital Payments, Savings, Inter-Household Transfers

JEL code(s)

G510, G530, I380, D12, O12, C93

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

In response to the broad and devastating economic impacts of the Covid-19 pandemic on households, the national government of Colombia developed and implemented a new cash transfer program, Ingreso Solidario, to provide consumption support to vulnerable households that were not beneficiaries of any program in the Colombian safety net. To lower transaction costs and avoid personal contact that could contribute to the spread of the coronavirus, the government is turning to mobile money or electronic transfers to bank accounts or digital wallets as safe, secure, and efficient modes of payment. In addition to these logistical benefits and lower transaction costs, the large-scale usage of digital modes of delivering cash transfers may lead to benefits for households. Many households without prior access to a formal financial institution will be introduced to formal digital payments and interact with a formal financial institution for the first time.

This study uses a randomized control trial to study the impact of outreach from a financial institution as part of a public-private partnership on take up of simplified digital accounts and digital receipts of cash transfers. Additionally, we will study the impact of financial inclusion on households’ financial outcomes, formal employment, time use and usage of health services using a combination of administrative records and survey data.

External Link(s)

Registration Citation

Citation

Hoffmann, Bridget, Camilo Pecha Garzon and Diego Vera Cossio. 2022. "Financial Inclusion through a Public-Private Partnership: Evidence from Ingreso Solidario in Colombia." AEA RCT Registry. March 25. https://doi.org/10.1257/rct.7755-1.1

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Experimental Details

Interventions

Intervention(s)

The intervention is outreach from a financial institution as part of a public-private partnership. First, SMS or web-based (including infographics) messages will be sent to beneficiaries. Second, local public servants in treatment municipalities will be available to answer questions about the process and requirements of opening a digital account and receiving transfers electronically. The local public servants will display and distribute informational material and may disseminate information through their social media accounts, but they will not proactively reach out to beneficiaries. Third, the financial institution will open pop-up branches for 1-3 days in treated municipalities and treated individuals will be notified about the opening of these pop-up branches.

Intervention Start Date

2021-05-24

Intervention End Date

2021-07-30

Primary Outcomes

Primary Outcomes (end points)

Mode of payment for cash transfer (cash or digital), usage of FinTech products and financial products from formal financial institutions, mode of spending, inter-household transfers, consumption patterns, savings, and financial literacy

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Formal employment, health services usage, time use

Secondary Outcomes (explanation)

Experimental Design

The study sample consists of 53,000 households in 30 municipalities of Colombia. Colombia contains 1123 municipalities. First, municipalities that are department capitals were excluded as the government interest was to evaluate interventions to boost the take up of digital wallets in smaller localities with harder-to-reach beneficiaries. Second, municipalities were ranked by the number of unbanked Ingreso Solidario beneficiaries and the top 10% were retained. Third, from this list, the 30 municipalities with the greatest number of locations of the financial institution were selected.

The first randomization assigned municipalities to treatment and control. Stratified randomization was used to assign 15 municipalities to treatment and 15 municipalities to control. Two strata based on the number of locations of the financial institution were used. The second randomization assigned beneficiaries to treatment and control groups in equal proportion within each municipality. Therefore, only beneficiaries assigned to the treatment group in the treatment municipalities receive the intervention.

The treatment effect can be estimated by comparing outcomes for the treatment beneficiaries in the treatment municipalities to outcomes for beneficiaries in control municipalities. Spillovers can be estimated by comparing outcomes for the control beneficiaries in treatment municipalities to outcomes for beneficiaries in control municipalities. The randomization of beneficiaries in control municipalities into treatment and control groups can be used for placebo tests.

We will analyze outcomes in administrative records (mode of payment, ownership and use of formal financial products, formal employment, and usage of health services) using this study sample of 53,000 households. We will analyze treatment effect heterogeneity on the main outcomes based on predetermined municipality-level characteristics such as number of bank branches, ATMs, point-of-service terminals and demographic characteristics of local agents. Also, we will analyze heterogeneous effects by gender and household size for the main outcomes and time use. We plan to conduct household surveys using a sample of 5,000 of the 53,000 households, approximate equally split between treatment and control groups, that will allow us to examine additional outcomes of interest.

Control: no intervention
Treatment: Encouragement intervention

Experimental Design Details

Randomization Method

Randomization done in office by computer

Randomization Unit

Municipalities and individuals

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

Study sample size: 30 municipalities; 53,000 individuals
Survey sample size: 30 municipalities; 5,000 individuals

Sample size: planned number of observations

Study sample size: 30 municipalities; 53,000 individuals Survey sample size: 30 municipalities; 5,000 individuals

Sample size (or number of clusters) by treatment arms

Study sample size:
Control municipalities: 15
Control individuals: 15,000
Treatment individuals: 15,000
Total individuals: 30,000
Treatment municipalities: 15
Control individuals: 11,500
Treatment individuals (in intervention): 11,500
Total individuals: 23,000

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB