Tools for Financial Literacy @ UCI

by Nandita Badami, doctoral candidate in Anthropology at UC Irvine

What do a fairy princess ball, a personal finance survey generator, and an online arcade game have in common? They are all tools that can be used to improve communication, learnings, and engagement with financial literacy.

This was only one of the many takeaways from the Tools for Financial Literacy, Empowerment and Justice convening held on June 28 at UCI’s Student Center. Hosted by the Institute for Money, Technology, and Financial Inclusion (IMTFI) and sponsored by Wells Fargo, the convening was a day of interactive workshops and talks that brought together practitioners from Orange County and LA County community organizations with experts in the fields of financial literacy research and pedagogy.

The day opened with welcoming remarks from Keith Kobata, Wells Fargo region bank president for Orange County, and Professor Bill Maurer, IMTFI Director and Dean of the School of Social Sciences at UCI. Prof. Maurer discussed the importance of acknowledging that many in the room had several years of engagement in the field of financial literacy (as directors or implementers of their institution’s programs), but relatively few had received formal financial literacy training in the course of their own education. Financial literacy is only just getting recognized in school and college curricula, and is a long way from being mainstreamed. The purpose of the convening, Maurer reiterated, was to “connect as a community, refresh perspectives, and to share resources towards a common goal.”

Organizations in attendance. Photo credit: Katie Sauer, Twitter

Resource sharing guided activities for the rest of the day: three invited expert organizations – Brain Arts Productions, the National Endowment for Financial Education (NEFE), and Next Gen Personal Finance (NGPF) – shared very different methods and approaches to engage learning.

Brain Arts Productions specializes in building financial literacy through the creative arts. Gwen Tulin and Liz Lark-Riley began the day with an interactive activity that got all the participants on their feet, working through difference between barter and trade through a card game, and demonstrating a teaching technique called Learning by Doing. Each participant received a packet of four to six cards, and a number (taped to a scroll on the bottom of their chairs!). The objective of the game was to get four cards that matched the number on their scroll, but participants could only do so by a 1-to-1 barter system: they could only trade one card at a time with someone else. Participants had only 10 minutes replace all the cards they were dealt with to match their personal number. After they did, they yelled “Match!” The game then abruptly changed: the organizers told us we had all won the lottery, and everyone received new wildcards that could be traded for anything. In this new form of the game, trading became easier, and many more people were able to yell “Match!”

After the activity, Gwen and Liz led the group through a reflection exercise. The point of the game was to demonstrate the difference between barter and trade using money—in this case, the wildcard that could be traded for any other card—but also to have the group converse with one another so that they could come to the realization that the privileges in the game were unfairly distributed. Some people had more cards to begin with (6, not 4), and this made it easier for them to win the game. The takeaway was as much about the difference between barter and trade as it was about the politics of resource distribution.

Bartering activity led by Brain Arts Productions.

Following the first workshop, senior director Dr. Katie Sauer of the National Endowment of Financial Education (NEFE), gave participants an overview of the current state of the personal finance ecosystem. Dr. Sauer showed how various elements – small dose lesson plans (not part of a broader curriculum), articles and reference resources, calculators, tips and tricks, expert advice, coaching, fintech innovations – interact to make a financial literacy ecosystem. Speaking about the need to understand how the various elements interact in order to “rightsize” expectations from individual interventions, Dr. Sauer challenged the audience to go beyond thinking in terms of individual interventions, and consider instead how to deploy several elements of the ecosystem together. She then finished off her research presentation by sharing NEFE’s Financial Education Evaluation Toolkit, an online tool to create free personal finance test to evaluate current programming: https://toolkit.nefe.org/.

Dr. Sauer: "Even the highest quality, perfectly dosed and delivered influence will be mitigated by other elements with the ecosystem."

Personal Finance Ecosystem, National Endowment for Financial Education © 2019 

From an overview of the ecosystem, the participants were then transported to a specific element of it. Christian Sherrill from Next Gen Personal Finance (NGPF) took the participants through a tour of the contents of the NGPF website – a resource hub for financial literacy educators. The participants explored NGPF’s various resources – including an interactive library, a quiz games library, and a video library. They also spent time on the website’s arcades page playing NGPF’s specially designed video games that help “game out” real life situations. These situations included paying for college, managing credit, making it through the month on a tight budget, and even what it means to live life as an Uber driver! Our table went through the budgeting app SPENT. We were each given a scenario, playing as an unemployed American (of the 14 million that currently exist), with meagre savings of $1000. How were we going to make it through the month? Some of us made it, some of us didn’t—but playing through real-life situations allowed us to appreciate the stakes involved in good budgeting (try it here: http://playspent.org/html/).

Learning by playing, NGPF's Christian Sherrill. Check out their free online personal finance arcade games here: https://www.ngpf.org/arcade/.

Brain Arts’s second activity demonstrated a tool called Process Drama where volunteers were invited to attend and buy provisions for a fairy princess ball. The group needed to travel to the Goblin Market and make decisions about what and how much to buy together. In doing so, the group was able to arrive at ways to negotiate personal values and spending as a group. Although an obviously unrealistic scenario, as is point of process drama—role-playing builds worlds through which to explore financial situations in low stakes contexts. Alternate worlds allow individuals to who tend to be more conservative or worried about taking risks in real life to explore multiple possibilities in a risk-free environment. Topics covered through process drama can include the following: negotiating for a raise, buying a house for the first time, applying for student loans, learning how to invest, and opening a bank account. After the activity, participants brainstormed contexts in which elements of their existing programs could be conveyed through process drama activity.

At Goblin Market: Process Drama activity with Brain Arts Productions to learn and reflect upon unconventional pedagogical techniques for financial education.

Brainstorming ways to use process drama for existing programs.

In addition to these workshops, Linda Nguyen, Vice President of Corporate Philanthropy and Community Relations at Wells Fargo, led a roundtable discussion with community practitioners: Claudia Flores from Human Options, Mary Anne Foo of OCAPICA, Yanet Gonzalez from Templo Calvario CDC, and Steven Kim from Project Kinship. Together, they discussed the importance of financial education, its role in transitioning from survival to sustainability, and solving the problem of generational poverty. They also discussed the various challenges facing the financial literacy training community such as:

• how to integrate financial literacy into existing programs (for instance, parenting—how do you model financial literacy for kids?)
• how to assess the level of financial literacy of individuals to point them in the direction of appropriate programs (a finlit course, or more extensive knowledge and behavioral changes?)
• the challenge of integrating financial health and mental health, and serving critical populations like refugees or victims of domestic violence.

Related to the latter point was the importance of recognizing financial abuse as a kind of domestic abuse to begin with. Questions and answers after the roundtable touched upon an additional challenge: how to measure success. As one participant put it, perhaps there is no “magic ruler” to measure success; success in this field looks different depending on where you start out.

Roundtable of community practioners.

Steven Kim of Project Kinship unfurling a list of the 48,000 barriers to employment if you have a felony conviction.

Participants took away ideas they wanted to develop further and eventually implement in pilot programs or additions to their existing activities. It was great opportunity to take time out of the day-to-day grind, take a step back, and imagine new ways of connecting and learning. As Monica Sauceda, who teaches financial literacy and entrepreneurship to high school youth at Templo Calvario CDC put it, “This event was very important to me as I have looked up some of the resources provided at the event on my own but as a small non-profit we do not have a team of trained individuals to do extensive research nor are experts in teaching. We rely on events like these to be informed and network with like-minded people to bounce ideas off of to be able to better serve our community.”

Towards the very end of the day, Prof. Maurer announced avenues for further engagement, including opportunities for expertise sharing between the UCI team and the various participants. The day ended with a networking reception, and promises for next steps at a national scale!

To access additional open access online educational and research resources visit: https://sites.google.com/uci.edu/toolsforfinlit.


Photo credits: AntMedia UCI Student Center Event Services.

Drama in the payments infrastructure and saturation in financial education: Discussing new avenues of research around financial inclusion in Colombia

In IMTFI's PERSPECTIVES blog series, IMTFI’s International Board members and affiliated researchers take on the definition of financial inclusion. This series aims to foster an open dialogue on issues around money, technology, and financial inclusion for the world’s poor. Individual contributions reflect contributors' own reflections on recent events based on their research and areas of expertise. The topic of financial inclusion will conclude with a capstone white paper by IMTFI titled "Mobile Money: The First Decade."

By Maria Elisa Balen, Universidad Nacional de Colombia and Edgar Benítez, Universidad ICESI 

We are reporting on the forum entitled “'Opening the Economy': Debates about Financial Inclusion - between Profitability and Over-indebtedness” that took place on May 4th at ICESI University in Cali (Colombia), and the workshop on the following day. These two events, bringing together perspectives from public policy, industry, and academia, sought to motivate new generations of researchers to study the promises, problems, and challenges surrounding financial inclusion developments (for the full program, click here). Yet they also became a lively space for discussion between the audience and panel participants. We want to highlight three sets of insights pertaining to the conference’s opening talks and subsequent panels, pertaining to the pluralization of the notion of financial inclusion, what is at stake in current changes in the payments infrastructure, and the important yet saturated field of financial education.

The pluralized notion of financial inclusions

Being financially included can have different interpretations, and the conference’s two opening talks would set the stage for the debate. Carlos Moya gave an overview of the programmatic strategies being followed by different countries across the region that are part of the Financial Inclusion Initiative for Latin America and the Caribbean (FILAC), which he coordinates. Throughout his presentation he stressed the positive impact of having formal access to credit, saving accounts, and insurance for poor communities; in this view, financial inclusion means inclusion into financial formality. Such a perspective was problematized by the second presenter, IMTFI fellow Magdalena Villareal from CIESAS in México. She pointed out not only how among communities ‘financial inclusions’ already take place through participation in different circuits and types of debt, but also that what is referred to as the formal financial system also entails different sorts of inclusion depending on the varied negotiation power of particular individuals and populations.    

The pluralized notion of financial inclusions, left in the air as an invitation, helps ask not only whether populations are being financially included, but what type of financial inclusion is taking place. The following panels would, in a way, pursue the specification of the financial inclusion taking place when discussing both developments in the country’s financial infrastructure—marked by the move towards digital payments—and the challenges of financial education in contexts where expensive yet highly available loansharks (known as paga-diarios or gota a gota) can constitute not only pervasive practices but possible interpretive frameworks to use as starting point for trainings and campaigns.

Drama in the payments infrastructure 

“You need to learn when to commit suicide.” That was the beginning of the answer given by Hernando Rubio, the charismatic CEO of Movilred, to a student in the audience asking what his so-far successful enterprise could do if/when Facebook starts offering electronic payments. “And then, like the phoenix, be reborn as something new,” he continued. Rubio has been one of the main supporters of Colombia’s recent financial inclusion law and the decree that introduces a new entity –Societies Specialized in Electronic Payments and Deposits—into the regulatory framework of Colombia’s financial system. For Rubio there is no doubt that digital payments are the future not only of cheaper transactions, but also of democratizing credit on the basis of cheaper and more effective ways of knowing customers thanks to the harnessing of electronic data.

 The other presenters on his panel on payment infrastructures had similar, though more tempered, views. Andrés Velásquez, from the financial cooperative Confiar, insisted on the importance of using different, complementary means to reach and interact with clients, including digital payments as well as chatting over coffee. But it was Ricardo Gómez, regional manager of Colombia’s Banco Agrario, who offered a contrastingly different perspective. Owner of the largest and most dispersed physical infrastructure throughout Colombia’s

territory, Banco Agrario’s high operational costs include the hiring of helicopters to move cash in and out of distant municipalities where the lack of telecommunications or even electrical infrastructure makes digital options unavailable. If digital is the future, then there is still a long way to go in order to avoid such populations being left behind.

Whether the time for more traditional financial entities to ‘commit suicide,’ as Rubio would say, is coming soon or not, a historical example came up concerning Banco Agrario itself that brought into relief the importance of alternative payment infrastructures. In the 1990’s, the large chain of drugstores called Drogas la Rebaja, owned by family members of the heads of Cali’s drug cartel, was included in what came to be known as the “(U.S. President) Clinton List.” Being on that list entailed sanctions, including exclusion from the payment networks of U.S.-based Visa and Mastercard. Drogas la Rebaja would turn into a cooperative run by its employees, yet continue to be part of the Clinton List. It was only through Banco Agrario that the largest drugstore chain in the country, with more than 4,000 employees, was able to have bank accounts to continue operating during the decade-long lag between the priorities of the U.S. war on drugs and those of the Colombian government. What this example brought home is that the configuration of payment infrastructures not only entails varied costs, but also can affect sovereignty.

In sum, if the move towards digital payments seems inevitable and large changes are already taking place in this regard, then the availability of alternative payment infrastructures seems key not only if one seeks to avoid deepening the exclusion of certain populations, but also considering the margin for maneuvering given by different payment infrastructures that are far from neutral or apolitical.

Dispersion and saturation in financial education

The panel on financial education had three different perspectives on the topic, though they shared a basic assumption: people need more financial education in Colombia. Nidia Garcia, head of the department of Financial and Economic Education at Banco de la República (Colombia´s central bank) did a presentation on the main points of the national strategy of economic and financial education (EEF). Based on healthy financial habits, responsible use of money, and financial capabilities, that strategy represents the first attempt at promoting a unified national framework for financial education. Because the EEF was launched just a month ago, it is too early to have an idea of its reception among institutions, banks, IMFs, and the like. This top-down process will be interesting since financial education is not a new topic among institutions in Colombia like Fundación WWB-Colombia and Fundación Paz y Bien, whose representatives constituted the rest of the panel.

Daniela Konietzko, the director of Fundación WWB-Colombia, a leading microfinance institution with a bank of its own, pointed to some difficulties that they have faced during the last years in their programs. Among them are two that represent an important challenge for any institution interested in promoting financial education. First, time-intensive educational programs have been the most effective ones in terms of developing financial capabilities, yet the fact that poor women have multiple social and economic responsibilities in their homes and micro-businesses makes it harder to develop these kinds of programs for them. Second, since financial education has become so popular among institutions, people have begun to feel that a saturation point has been reached.

That saturation was also emphasized by Alicia Meneses, who has helped to create and develop the educational model of Fundación Paz y Bien, a grassroots organization. In her view, “People don´t like going to workshops or taking classes; they are tired.” In order to avoid this situation, she and her workmates have developed community-based interventions as the key components of their financial education programs. Rather than emphasizing individual capacities and skills—as the former approaches did—Alicia believes that acquiring good financial habits is a collective process of learning-by-doing. In a similar fashion to the Grameen Bank model based on social capital and networks, Fundación Paz y Bien showed us that learning the habit of saving requires collective strategies (i.e. saving clubs) with common purposes.

In sum, what is identified as the continued need for financial education faces a crowded scenario, not only in terms of the multiple activities in which potential beneficiaries such as poor women are engaged, but also in terms of the varied and dispersed financial education initiatives they have been already exposed to, which adds up to a feeling of saturation.

In such a context, is changing financial practices a matter of systematizing the diverse financial education initiatives and evaluating their outcomes in order to move towards a more coordinated approach based on lessons learned, as the central bank seeks to do? Is it a matter of designing strategies that are carefully tailored to the life conditions and motivations of particular populations? Or is it, as the Movilred CEO emphasizes, mainly a matter of making credit cheaper and more available using digital technologies, so that customers on their own will see the benefit and choose the better option? Such were the questions left hanging in the air.

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This event was part of two longer term endeavors. On the one hand, this was the first in a series of forums that ICESI University is launching under the title “Opening the Economy,” which seek to foster academic reflection about the economy from viewpoints that are not limited to those of mainstream economists. On the other hand, it is part of the process of configuring the Latin American node of the international network of researchers that are part of IMTFI. In the upcoming months, we plan to launch an online platform in which researchers working on social studies of money and finance in Latin America can learn about each other’s work, interact, and pursue common research agendas.

Maria Elisa Balen is an international board member of IMTFI and an affiliated researcher at the Universidad Nacional de Colombia. Contact Maria Elisa at mebalenu@unal.edu.co; Edgar Benítez at ebenitez@icesi.edu.co

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

See you in the funny papers: women love comics about financial literacy

Research by IMTFI fellows Deepti KC and Mudita Tiwari featured in The Guardian Visa Partner Zone 

Studies show women in developing countries aren’t impressed with conventional financial literacy resources – and few of them use formal bank accounts. In India, comic books and illustrated characters have become successful education tools comic illustration financial literacy education tool Indian women

Comics proved successful in teaching women in India about personal finances. 

Photograph: IMTFI and IFMR LEAD

"Deepti KC and Mudita Tiwari always wanted to help women from low-income communities to save money. Having both grown up in Jharkhand, India – and KC, additionally, in Nepal – they knew firsthand the struggles of low income and lower caste women to get ahead. “Women must run their households, feed their children, save for healthcare expenses and their children’s future education – all on a limited salary. And many are single mothers too, maintaining the financial weight on their shoulders,” Tiwari says.

So in 2012, as researchers with the Institute for Money, Technology and Financial Inclusion (IMTFI), housed within the University of California, Irvine, the pair traveled to India to launch a financial literacy campaign for women. “This audience seemed most affected by the banks not including them within their channels,” Tiwari explains.

They eventually realized that any tool meant to educate women about the power of a safe, informal banking channel must appeal to children and women, be respectful, and show the challenges that female entrepreneurs face when managing their income without access to convenient financial services. As it turns out, comic book and illustrated characters mirroring these women provides the perfect, immersive vehicle.

Mudita and KC see additional use for their free, downloadable financial literacy materials, including partnering with evangelists and technology providers to help distribute their product to nonprofits working with low-income women. Android and iPhone apps will help nonprofits adapt the materials.

The two also suggest that banks:

• Make women the front and center in any marketing materials to ensure products and campaigns are authentic and actually appeal to them.
• Be empathetic. Understand the obstacles that slum women face when saving, like household conflicts, living in a male-dominated society and having no time to spare for standing in a long bank line. Use characters and models resembling the market: female entrepreneurs from poor households.
• Provide female officers to speak sensitively to women at banks and post offices – only then will those customers feel comfortable asking questions.
• Extend brick and mortar banks’ hours to 8pm. Ensure in high-density areas that ATMs don’t run out of cash or shut down.
• Help employers provide more automatic savings options."

Find pdf of the feature story from The Guardian here.

Deepti KC has a Bachelor’s degree in Civil and Environmental Engineering from the National Institute of Technology (NIT) – Jaipur and has a Master’s degree in Environmental and Public Health Engineering. She also has a Master’s degree in Fundraising Management and Nonprofit Administration from Columbia University.  Deepti currently works as a Senior Manager and is involved in carrying out several research projects relating to financial inclusion.

Mudita Tiwari holds a Master's in Public Policy and a Master's in Public Health (Epidemiology/Biostatics) from the University of California, Berkeley, and a B.B.A in Information Technology from Cleveland State University. At CMF, she is working on research evaluating the impact of microfinance, financial inclusion, financial literacy programs, and agricultural financing programs in the states of Uttar Pradesh, Bihar, Maharashtra, Punjab, Tamil Nadu, and West Bengal.

The full report of their research can be found here.