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When Can Financial Education Affect Savings Behavior? Evidence from a Randomized Experiment among Low Income Clients of Branchless Banking in India

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  • Calderone, Margherita
  • Fiala, Nathan
  • Mulaj, Florentina
  • Sadhu, Santadarshan
  • Sarr, Leopold

Abstract

Financial literacy programs are popular, despite recent research showing no significant changes to savings behavior. We experimentally test the impact of financial literacy training on clients of a branchless banking program that offers doorstep access to banking to low income households. The intervention had significant impacts: savings in the treatment group increased by 29% ($27) within a period of one year. The increase in savings is due in part to decreases in expenditures on temptation goods. These results suggest that financial education interventions, when paired with banking experience, can be successful in changing savings outcomes.

Suggested Citation

  • Calderone, Margherita & Fiala, Nathan & Mulaj, Florentina & Sadhu, Santadarshan & Sarr, Leopold, 2014. "When Can Financial Education Affect Savings Behavior? Evidence from a Randomized Experiment among Low Income Clients of Branchless Banking in India," Working Paper series 290095, University of Connecticut, Charles J. Zwick Center for Food and Resource Policy.
    • Handle: RePEc:ags:ucozwp:290095
    DOI: 10.22004/ag.econ.290095
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    Cited by:

    1. Kaiser, Tim & Menkhoff, Lukas, 2018. "Active Learning Improves Financial Education:," Rationality and Competition Discussion Paper Series 131, CRC TRR 190 Rationality and Competition.
    2. M. A. Baqui Khalily, 2016. "Financial Inclusion, Financial Regulation, and Education in Bangladesh," ADBI Working Papers 621, Asian Development Bank Institute.
    3. Antonia Grohmann & Lukas Menkhoff, 2020. "The Relationship between Financial Literacy and Financial Inclusion," Discussion Papers of DIW Berlin 1914, DIW Berlin, German Institute for Economic Research.
    4. Tim Kaiser & Lukas Menkhoff, 2018. "Active Learning Fosters Financial Behavior: Experimental Evidence," Discussion Papers of DIW Berlin 1743, DIW Berlin, German Institute for Economic Research.
    5. Margherita Calderone, 2014. "The Role of Financial Literacy and of Financial Education Interventions in Developing Countries," DIW Roundup: Politik im Fokus 34, DIW Berlin, German Institute for Economic Research.
    6. Helke Seitz, 2020. "Subgroup Analysis of Investment Constraints: Evidence from Ugandan Microenterprises," Discussion Papers of DIW Berlin 1920, DIW Berlin, German Institute for Economic Research.
    7. Tim Kaiser & Lukas Menkhoff, 2017. "Does Financial Education Impact Financial Literacy and Financial Behavior, and If So, When?," The World Bank Economic Review, World Bank, vol. 31(3), pages 611-630.
    8. George Okello Candiya Bongomin & Joseph Mpeera Ntayi & John C. Munene & Isaac Nkote Nabeta, 2016. "Financial Inclusion in Rural Uganda: Testing Interaction Effect of Financial Literacy and Networks," Journal of African Business, Taylor & Francis Journals, vol. 17(1), pages 106-128, January.

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