Freedom From Hunger Savings Training Evaluation

A large body of evidence from both developed and developing countries suggests that low income households have strikingly low levels of financial literacy. A number of government, non-profit, and for profit institutions have created free or highly subsidized programs to provide basic financial literacy training to low income households. Despite the popularity of such programs, we have little empirical evidence on whether these programs actually improve welfare. In this study, we conduct a randomized control trial with real microfinance borrowers in Northern India to determine whether a financial literacy program improves financial literacy levels and increases the achievement of savings goals. The savings program we evaluate builds on prior interventions by providing (1) substantially more interactive time with the instructor (nine 1 hour sessions), (2) follow up visits to monitor progress, and (3) by harnessing the group structure of microfinance to allow for the possibility that learning with others increases retention. We randomly assigned one hundred microfinance groups to receive the financial literacy training program, and one hundred groups to serve as a control group.