Combining Financial-Literacy Training and Text-Message Reminders to Influence Mobile-Money Use and Financial Behavior among Members of Village Savings and Loan Associations:Experimental Evidence from Malawi

Mobile money is increasingly promoted as a strategy to improve financial outcomes and livelihoods in low-income countries. However, its adoption and use among the poor remains low. We exploited a randomized experiment that exposed members of Village Savings and Loan Associations in Malawi to a financial-literacy and mobile-money training program, which was reinforced by weekly text-message reminders. We analyzed the impact of our intervention using survey data collected in the field as well as administrative data from the main telecommunications operators in the area. We found that treated individuals were more likely to have greater knowledge of mobile-money transactions than non-treated ones. They were also more likely to report receiving and saving money using mobile money and were more likely to report that they kept their savings in a formal financial institution. Interestingly, these effects were concentrated in relatively less economically developed areas. We used administrative data to analyze the effects of our intervention on the volume of mobile-money transactions. While the estimated effect had the expected positive sign, it was not statistically significant. We hypothesized that this result may be related to the fact that individuals also relied on local agents to perform mobile-money transactions; such behavior was not captured in administrative data. This is among the first studies to provide rigorous field-based evidence regarding how financial training supported by text-message reminders can influence mobile-money behavior. It is also among the very first to study the effects of such an intervention among members of Village Savings and Loan Associations.