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Financial Education and Savings Behavior: Evidence from a Randomized Experiment among Low-Income Clients of Branchless Banking in India

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

Abstract

Financial literacy programs are popular, despite limited evidence that they lead to significant changes in 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: total savings in the treatment group increased by 49% ($39) within a period of 1 year. The increase in savings is due in part to decreases in expenditures on temptation goods. These results suggest that financial education interventions can be successful in changing savings outcomes, although results may be very context specific.

Suggested Citation

  • Margherita Calderone & Nathan Fiala & Florentina Mulaj & Santadarshan Sadhu & Leopold Sarr, 2018. "Financial Education and Savings Behavior: Evidence from a Randomized Experiment among Low-Income Clients of Branchless Banking in India," Economic Development and Cultural Change, University of Chicago Press, vol. 66(4), pages 793-825.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/697413
    DOI: 10.1086/697413
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    Citations

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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. Antonia Grohmann & Lukas Menkhoff & Helke Seitz, 2022. "The Effect of Personalized Feedback on Small Enterprises’ Finances in Uganda," Economic Development and Cultural Change, University of Chicago Press, vol. 70(3), pages 1197-1227.
    3. Ascaryan RAFINDA & Tímea GÁL, 2019. "The Educational Programme For Micro Investment In Agriculture In Indonesian Rural Areas," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 19, pages 23-38, May.
    4. repec:diw:diwwpp:dp1864 is not listed on IDEAS
    5. Angelo D’Andrea & Patrick Hitayezu & Mr. Kangni R Kpodar & Nicola Limodio & Mr. Andrea F Presbitero, 2024. "Mobile Internet, Collateral, and Banking," IMF Working Papers 2024/070, International Monetary Fund.
    6. Barua, Rashmi & Shastry, Gauri Kartini & Yang, Dean, 2020. "Financial education for female foreign domestic workers in Singapore," Economics of Education Review, Elsevier, vol. 78(C).
    7. repec:diw:diwwpp:dp1920 is not listed on IDEAS
    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.
    9. Schoofs, Annekathrin, 2022. "Promoting financial inclusion for savings groups: A financial education programme in rural Rwanda," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    10. Kaiser, Tim & Lusardi, Annamaria & Menkhoff, Lukas & Urban, Carly, 2022. "Financial education affects financial knowledge and downstream behaviors," Journal of Financial Economics, Elsevier, vol. 145(2), pages 255-272.
    11. Boyd, Chris M. & Díez-Amigo, Sandro, 2023. "Effectiveness of free financial education provided by for-profit financial institutions: Experimental evidence from rural Peru," Economics of Education Review, Elsevier, vol. 97(C).
    12. repec:diw:diwwpp:dp1914 is not listed on IDEAS
    13. repec:diw:diwwpp:dp1743 is not listed on IDEAS

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