Monday, March 14, 2016

Financial Education via Television Comedy: Evidence from a Pilot Study in Cambodia

Andrew Crawford, Paul Lajbcygier and Pushkar Maitra, Monash University

Spreading financial literacy and fostering financial inclusion across a heterogeneous population is crucial for sustained and inclusive economic growth and development. Our goal is to explore the potentials of broadcast television to spread basic financial literacy at low cost across entire populations especially in remote locations. Broadcast TV may be able deliver accessible, memorable, and entertaining education to those normally excluded from financial services.
Financial education skit
The Cambodia Microfinance Association (CMA), in conjunction with our research team, produced a 5-minute skit that will ultimately be a part of a highly rated weekly comedy show in the country. The show involves a storyline focusing on concepts related to financial knowledge, loan management and savings. The video was shown to a randomly selected group of garment factory workers during their lunch break in a ‘pilot study’ (the episode is yet to be broadcast on television). A second similarly selected group of garment factory workers were shown a financial literacy slideshow video covering the same material without any comedy content. The financial topics that were covered in the video and slide show included debt, savings accounts, and microfinance business loans. Figure 1. presents the percentage of time spent on each component of financial literacy. 
Figure 1: Time allocation to different aspects of financial education in the video
After watching the respective videos, the participants were asked to participate in a survey to collect information on their financial knowledge and attitudes toward the related financial products. The results were compared to that of a third (baseline) group that consisted of randomly selected garment factory workers who participated in the same survey as the two treatment groups without having watched either of the two videos. All the sessions were conducted in garment factories located in the Special Economic Zones that are within 50 km of the capital city of Phnom Penh. 

Screening of videos in garment factories
Figure 2 shows clear signs of increased attraction to savings accounts following the screening of the comedy video. Out of those who watched the comedy show, only 5% are ‘not interested’ in savings accounts afterwards compared to 21% of slideshow video viewers and 18% in the control group. Both 'very interested' and 'somewhat interested' scores were higher for individuals assigned to the comedy treatment compared to those assigned to the slideshow or the control treatments. Using multivariate regressions we found that the likelihood of reporting 'interested' or 'very interested' is almost 14 percentage points (or 17%) higher in the comedy treatment group than in the control treatment group and almost 18 percentage points (or 19.5%) higher than in the slide show treatment. We believe that the comedy story line and narrative about savings accounts made their benefits more real and relevant in comparison to the slide show.

Figure 2:  Interest to obtain information on savings and microfinance loans

While the video was effective in changing attitudes to savings accounts it was less successful in changing attitudes toward microfinance loans. Approximately 36% of comedy viewers, 38% of slideshow viewers and 32% of those in the control treatment disclosed lack of interest in microfinance loans for business. Similarly over 70% of respondents in each group said they would not apply for a loan in the next 6 months. This was corroborated using multivariate regression analysis. Furthermore, we found that individuals randomly assigned to the comedy treatment report were significantly more likely to have their own savings account in the next 6 months. However there seemed to be very little effect on the willingness to have a new microloan in the next 6 months.

Further examination of the survey data reveals the reasons for the differential effect. Both savings and loans respondents were asked why they had never used the products. With regards to savings, over 16% of all respondents said it was because they had no previous knowledge of savings accounts. On the other hand less than 3% had no previous knowledge of microloans. Over 64% replied they had never needed a microloan and only 20% of all respondents had previously taken out a microloan. This deeper examination suggests that a large number of respondents have knowledge of microloans but feel that they have no need for them. Other reasons for not borrowing included cost of interest (7%), belief that MFIs are expensive (6%), fear of repayment (5%), and lack of collateral (2%). Thus, in this context, the information delivery mechanism (i.e., entertainment or slide show) would have less impact on microfinance business loans.

Policy Implications

The survey results indicate changed attitudes to some of the topics covered. We find evidence that attitudes towards savings accounts were significantly different for those who viewed the comedy show in comparison to those who viewed the slide show as well as to those who were assigned to the control group. It is to be noted that 30% of the video was devoted to savings accounts. Recently, policy makers and governments have promoted savings accounts in the developing world for use with transfer payments (see for example the Pradhan Mantri Jan Dhan Yojna – PMJDY – program in India). However, barriers preventing uptake of savings accounts continue to exist due to lack of access (e.g. proximity of branches, onerous paperwork) and business issues (e.g., lack of profitability of savings accounts for banks). In Cambodia, most garment factory workers could see the benefit of savings accounts after watching the comedy video and were interested in pursuing more information about them. The video was also more effective in piquing workers interests in savings accounts: possibly because the comedy video delivered the financial literacy content in a manner that was entertaining, accessible, memorable.

The successful use of financial education through entertainment media has broad implications for the delivery of financial education. It demonstrates that it could be an engaging and cost effective way to financially educate a broad range of people in developing countries around the world irrespective of their location as well as literacy levels. Television comedy therefore could be leveraged as a means of financial education and future TV shows should incorporate more content on financial matters, particularly if knowledge is low across the population.

Link to Final Report: Financial Education Via Television Comedy

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