Llyfrgell Ymchwil
World Bank's video-based financial education programme in India
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Description of the programme
This was a five-week comprehensive video-based financial education program with modules on savings, credit, insurance and budgeting. Each session lasted 2-3 hours
The programme was targeted at low-income urban households in one city in India (Ahmadabad), recruited through an urban development programme (around half of the sample were existing microfinance customers). It aimed to improve:
- Numeracy skills
- Basic financial awareness
- Attitudes towards financial decisions
Participants were incentivised to participate ($1 per session attended plus free travel transport to and from the training centre).
The study
One independent impact evaluation of the programme (conducted by The World Bank Development Research group) has been published. This study involved a randomised control trial (RCT) with two thirds of the sample watching the financial education videos, while one third viewed health education videos as a control. The knowledge and understanding of both groups was measured using a test and survey administered 2-3 weeks after the 5-week training programme.
Key findings
- Financial education had a positive impact on participants' attitudes towards purchasing and recommending financial services and planning tools. Programme participants were 5 percentage points more likely to suggest the use of a productive loan to others, 9 percentage points more likely to suggest buying an insurance product and 21 percentage points more likely to suggest making a budget to track income and expenditure than the comparison group.
- There was a large positive impact on basic financial awareness. Programme participants were 5 percentage points more likely to understand the concept of a household budget, 17 percentage points more likely to know minimum bank account opening requirements, and 20 percentage points more likely to understand the risks of loans than the comparison group.
However, the evaluation found no improvement in the following areas:
- choosing the most cost-effective loan option
- selecting the most appropriate savings or insurance product
- creating a budget effectively.
The results suggest that financial education programmes that do not specifically address numeracy skills may have little impact on the ability of participants to make financial calculations.
Points to consider
- Programme participants in this study had very limited schooling and therefore low numeracy levels (half-answered ‘don’t know’ to ’What is 8 per cent of 100?’).
- It is worth noting that the full report discusses this intervention in a wider context - of 'examining the causal impact of financial literacy on individual, household and firm outcomes', and specifically the links between financial literacy and financial knowledge.