Innovative and Interactive Ways to Improve the Savings Habits of Women

by IMTFI Researchers Deepti KC and Mudita Tiwari 

Sarala is a micro-entrepreneur with a bank account and access to banking services within 1 kilometer of her residence Dharavi, Asia’s largest slum in Mumbai. Yet, Sarala uses higher-risk and unregulated savings options such as chit-funds - a type of group savings mechanism where payouts are made using a lottery system. With Sarala’s husband often spending household savings on gambling or addictive substances, she continually strives for strategies to hide cash in food jars, piles of clothes, and among beauty supplies. Despite having bank accounts, she does not want to save with the bank. “I am not able to save enough to go to bank and deposit”, states Sarala.

A woman showing where she hides her money in the kitchen 

Sarala was not alone in thinking so. In the First Phase of the study, we followed the lives of 25 women in Dharavi for two months to study women’s saving behavior. It is to be noted that many women were not open to admitting their hiding strategies unless we visited them multiple times and gained their trust. Hence, we used an ethnographic research approach to learn about their lives in their local context. Women taught us about their savings needs. We were convinced that they needed i) financial counseling to address the psychological barriers they face about savings, and ii) savings products that are flexible, offer liquidity and promote daily savings. 

Design of the financial education modules and a savings tool
The lessons we learned in the First Phase of the study inspired us to design financial education modules using an interactive comic book format depicting the life of the women entrepreneurs. The characters were carefully crafted using life stories from women’s lives - challenges that women micro-entrepreneurs like Sarala face and how they overcome these financial challenges. The comic books introduce concepts of disciplined savings, and how to achieve short-term and long-term savings goals. 

An image from the comic book

While we believed that our financial education modules would encourage women to maximize their savings, at the same time, we also learned from our previous study that financial education is not enough if financial consumers do not have access to flexible saving products. 1  

Lately, economists and researchers have experimented with savings tools beyond basic banking access. The first study of this type introduced a lockbox to respondents in a randomized controlled trial in Kenya. 2 The findings show that supplying a secure lockbox to store money increased savings by 66 percent. They also found a positive impact for women with “below median decision-making power in the baseline.” The product led to a higher “self-perception” among the participants of their savings behavior and positively affected consumption decisions on durable goods. 

With an eye to the innovative project conducted in Kenya, we decided to provide alternative savings tools to our respondents, along with financial education, to understand if the savings products could improve their savings capability.

Experiment to understand the impact of the financial products 
In the Second Phase of the study, we conducted an experiment in Bihar with 203 women who were associated with Self Help Groups (SHGs). We provided 40 women with financial education training; 40 women with a lockbox and a key; 43 women with a lockbox and a key as well as financial education; and 80 women received no intervention. 

A female respondent and her family and neighbors listen to the story on savings 

We followed women for more than two months and recorded their savings at the end of first and second months. Women who received the financial education training increased their savings by 8% compared to women with a 1% increase in savings who did not receive financial education. Provision of the lockbox further significantly increased savings by 42-51% during the intervention. 

Data indicates that women who received financial education training shared their knowledge with others too. 77% of women who received training reported sharing their knowledge with others; 73% reported discussing the household’s expenses, budget and savings with their husband; and 59% reported they encouraged their children to save.  

A woman receiving a lockbox and a key

Increase in SHG bi-weekly saving
Women were meeting with their SHGs on a weekly basis, and in every meeting the majority (87 percent) was depositing Rs. 10, a minimum required amount to be a member of a group. The average bi-weekly savings amount during the baseline survey was Rs. 20. 
After we provided women with the intervention, SHG bi-weekly saving increased to Rs. 22 after a month; and to Rs. 32 after two months. There was a substantial increase in savings in women in the treatment group - who received a lock box and financial education training, compared to women in the control group - who received no financial literacy and lockbox from us. For example, bi-weekly savings of women in the control group increased from Rs. 26 to Rs. 31 - a 16% increased in saving, whereas women in the treatment group increased savings from Rs. 20 to Rs. 33, a 39% increase in bi-weekly SHG savings.  

Lessons learned
Our results align with other similar academic studies, like the Kenyan study noted above. We learned that understanding the financial behavior of women is a very crucial and progressive step towards finding solutions to empower women in the marketplace. Women like Sarala need savings products that are flexible, offer liquidity and promote daily savings. Women cannot go to banks every day, especially if they are living in rural areas that are far away from these services. The weekly engagement with SHGs is a step forward but still amounts to sporadic savings. In most cases, they are saving the minimum ‘required’ amount to remain a member. 

When promoting savings, the psychological barriers women face when trying to save must be addressed. Our findings indicate that context specific financial education, and reinforcing saving behavior through easy-to-use tools such as the lockbox, encourages women to save regularly. For example, in our study, women were actively hiding money away in their homes to ensure other household members don’t squander away savings. Providing a secure lockbox helped women put away money safely. Providing relevant financial education helped women save this money in banks and SHGs rather than at home or through chit-funds. 

Findings from this study can encourage NGOs and public policy makers to find very simple tools to implement that can help women increase their savings by a significant amount. This kind of an intervention is not only low cost, but also low maintenance and is the kind of short-term solution that is adaptable to the lifestyles and habits of poor women in India.

References:
1. KC, Deepti and MuditaTiwari. 2015
“Can Financial Literacy Help Migrants Save More?” Funded by Institute for Money, Technology, and Financial Inclusion (IMTFI), University of California. Published by IFMR Lead.

2. Dupas, Pascaline, and Jonathan Robinson. 2013a. 
“Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya.” American Economic Journal: Applied Economics 5 (1): 163-192.

Read Deepti KC and Mudita Tiwari's Project Report Innovative and Interactive Ways to Improve the Financial Capabilities and Savings of Women

Female Financial Literacy: Gender in Mobile Money and Financial Practices

In introducing this IMTFI panel, Rebecca Mann of the Bill and Melinda Gates Foundation argued that "gender is important," because women are less likely to be involved in the financial sector and among the poorest of the poor may thus find it harder to respond to financial shocks and to capitalize on opportunities, particularly because women earn money in smaller increments, even if they do so more regularly, which are dissipated in household expenses relatively quickly.  By highlighting "research that we are seeing" that "documents behaviors of women and girls," Mann expressed her hope that the daily expenditures of the very poor could be better understood.  She also took a moment to promote the Grand Challenges initiative, which in the past has tackled design challenges that range from the toilet to the condom, and its efforts in a new program for "Putting Women and Girls at the Center of Development."

In "Mobile Money, Social Capital, and Financial Behavior of Women’s Cooperatives in Rural Nigeria" by Onyima Jude Kenechi and Onugu Charles Uchenna of Nnamdi Azikiwe University, researchers asked the following question: "What are traditional ways of storing and transferring wealth?"  This fundamental baseline provides a key way for understanding how was/would mobile money be transformative, if "mobile money adoption changed the financial behavior of rural women."  Among their informants, 38% had no formal education, and 73% came from households with more than six occupants.  Among them were office cleaners, casual workers, petty farmers, hawkers, sales attendants, and apprentices.  99% own mobile phones, but they used them primarily for calls, texts, and downloads of music and pictures.  93% did not have ownership of a bank account, and only 5% participated in micro finance institutions.  In this demographic only 8% of respondents had heard of mobile money, and only 3% have used such services, as opposed to 46% awareness statistics in urban areas in which 16% of residents are also users.  Researchers attributed slow uptake to a number of factors, but singled out  lack of coordination between the National Communication Commission and the National Bank of Nigeria as a key problem.  Despite entry into the Nigerian market by 10 mobile money operators, relatively few of those most in need signed up for accounts.

Many informants mentioned the role of community leaders, particularly for authority figures and peers among church attendees, as important influencers in their decision making.  For example, researchers reported statements such as "I will use it if someone I trust like our priest educates me" or "I am not comfortable with it, but I can use it if our church member encourage it" or "If it’s that useful, how come other women in our church do not use it?”   Valuables were often kept by ministers, who might also participate in lending activities, serve as guarantors, or provide advice about financial services.  As the Ghana research team reported, the role of deities was also significant in the Nigeria study.

Issues of trust and difficulties in cooperatives also emerged as factors when "arguments and quarrels" were seen as likely consequences for business relationships outside of family structures.  Many respondents were still using advance payments to accumulate capital, despite a relatively strong home saving rate of 20%.  Other mechanisms included informal savings clubs, cooperatives, and thrift collectors.  (For context, respondents reporting spending 30% of their incomes on food.)

Women had access to a number of methods of storing wealth, however, including holding membership in groups, managing the marriage of a girl child, and benefitting from the role of in-laws, as well as from apprenticeships, church sources, title taking, and deities.  Material stores of wealth included jewelry, livestock, utensils, palm oil, and tubers as storage media.  Mobile money adoption had no significant effect on traditional modes of storing wealth, although it did reduce the use of bus drivers, relatives, and others for in-person transfers.  These new financial products also seemed to reduce the risk of being subject to creditors of a debtor coming after family members or being coerced into making sacrifices to deities.  They also appeared to reduce dependence on advance payment instruments.  Mobile money's effects on attendance at cooperative functions was not significant, because there were other socio-cultural reasons for attendance, although it did facilitate certain forms of joint liability by providing a means for peer screening, peer monitoring, and resolving information asymmetry.  Its role in kinship ties among cooperative members and growing a level of trust seemed significant, although fears of members performing transactions without anyone else’s knowledge remained, although members acknowledged it could be helpful in spotting fraud.  At 8% adoption, researchers argued that novel approaches needed to be pursued.  They asked another significant question: "How sacrosanct are the words of religious leaders in money matters and how could they be used to propagate and instill trust?"  Although they still wondered under what conditions could a bank-led model be preferable to operator-led model, they thought that religious leaders could certainly at least promote awareness.

"Assessing the Impact of Financial Knowledge on Adoption of Mobile Payment Systems among Enterprise Owners in Dharavi, Mumbai" by Mudita Tiwari and Deepti KC of India's Institute for Financial Management and Research presented a study conducted in the slum of Dharavi in Mumbai that gathered data from 100 business owners, 20 suppliers, 115 clients, 2 bank managers, and 25 banking agents in order to promote understanding movements of cash.  Researchers reported a strong cash preference, which could be attributed both to savings on taxes and to a lack of awareness and trust in financial products.  Consequently they argued for context-specific financial literacy modules for two groups: migrants and female entrepreneurs.  Despite a range of financial services available, including Tatkal agents able to remit money and employers able to transfer salaries to bank accounts directly, many still prefer informal economies and unbanked financial practices. Researchers showed a range of unconventional saving strategies involving hiding places that have become common practices of money management for women.  Money may be hidden in dirty boxes, talcum powder jars, and other nooks and crannies, but discovery often leads to domestic disputes and even violence from male partners.

First the group described their financial literacy strategy for their target group of 120 migrant workers, which was structured around 3 visits within a month.  34% were aware of mobile banking and 87% visited banking agents after training sessions, and they also seemed better equipped to control gambling, consumption of alcohol and cigarettes, and other “temptation expenses,” despite erratic income, leading to an almost 50% decrease in spending practices that undermine financial stability.

As a co-author of the comic book textbook, Understanding Rhetoric, I was particularly interested to see their financial literacy tools for women, which emphasized graphic media for storytelling and sequential art as a means of communication.   Before adopting this approach they found that the lack of information impeding financial uptake was compounded by apathy toward generic information that "didn’t click."  Those needing advice wanted to relate to stories and characters to understand how cash-only vs. cashless tradeoffs worked, their long-term savings capabilities, and possible improved decision-making processes.  Forgetfulness was also an important issue.  To provide context an interactive story-telling approach using comic books was deployed featuring two memorable practitioner-characters: Radha, who is always struggling with financial adversities, and Saraswati, her sensible money-managing friend who offers approachable solutions that reduce savings inertia over the long term.  Researchers actually used real-life stories to compose the narrative.  Next steps include expanding efforts to  Utter Pradesh and Bihar, making training videos on YouTube that animate the content, and translating existing comic books in different languages.  Audience member Jing Gusto was so enthusiastic about this approach, based on his own experiences of the educational value of telenovelas and SMS questions, that he proposed adapting 3 of the 7 stories of the Indian researchers for use in the Philippines and was counseled to emphasize  how to increase savings as a priority.

"Women, Monetary Practices, and Technological Innovations" by Kone Nara Kanugui Idriss of ENSEA emphasized that although the time of intense crisis in Côte d'Ivoire may have largely passed, which required many women to take children into their families, the financial repercussions continue.  He noted that Orange Money became the first mobile money services in Côte d'Ivoire, but was soon followed by MTN Mobile money, CelpaiD, and Flooz.  Yet even with four providers of mobile money services and 5 million accounts created between 2008 and 2014, obstacles remain.  His team of researchers designed a questionnaire with five sections: access, use, perceptions, monetary practices, and demographics.  Drawing upon a simple random sample of 477 respondents, drawn from Guro market women, one third of whom were single.  Many of those studied only had a primary school education, although they did benefit from a quasi-universal access to cell phones.  Mobile money services were popular among women, who identified their principal sources of information as being entourage influences, media messages, advertisements, and panels.  Only 32% had mobile money accounts, and 4 in 10 users were at the earliest stages of experimenting with mobile money. Trade was the main reason they ventured into novel financial products and services, although they reported occasional misadventures with PIN use, suspicions of agents, and long wait times.  Despite a general perceived ease of use and level-headed approach to risk, doubts sowed by the possibility that "they don’t give you all your money" remained.  Questions were designed to differentiate benefits.  For example, question eighteen dealt with gaining time "in your daily activities," while question nineteen addressed possible increased revenue.   More than a third of women surveyed still appeared to have serious doubts about mobile money services and reported low levels of financial inclusion in an environment in which 8 of 10 might have no access to financial inclusion.  In filling out the profile of a typical mobile money user, the women who emerged had secondary school education, reported perceived ease of use, and had access to the more established Orange mobile network.

Moderator Rebecca Mann challenged panelists to consider financial services beyond savings, including insurance and agricultural investment.  The Indian group of researchers did describe programs for mortgage payments, “good saver” programs that offered low-interest loans, and potential construction of women-only banks.  In the question-and-answer session, the audience expressed admiration for the Indian researchers' abilities to build such trust that the women were willing to show their secret hiding places.  Tiwari and KC explained that these results were the product of multiple trips, going without paper and pen, talking about their own lives, and telling stories with aggregated effort in 20-25 trips over two months.  "That’s why our sample size is so small!"

Small ruminants and financial security in rural Nigeria

We are pleased to release our newest working paper, from IMTFI researchers Isaac and Titilayo Oluwatayo on the use of small ruminants, like goats, as a form of financial security among women in rural Nigeria. From the authors:

We realised that small ruminants’ husbandry play a very crucial role in the lives of residents of rural Nigeria and this is because small ruminants provide the easiest and readily accessible source of credit available to meeting immediate and urgent social and financial obligations especially among the vulnerable women. Findings from our recent study show that rural women are involved in the rearing of small ruminants - sheep and goats especially around homes by feeding them kitchen wastes or most times leave them to graze on surrounding herbs and shrubs.  Primary data collected through administration of structured questionnaire and relevant secondary information gathered from livestock institutions in the study area were analysed using descriptive and inferential statistics.  The results of the analysis revealed that 58.7 percent of the respondents had farming as their primary occupation. Analysis of respondents based on the types of livestock raised showed that goat was the most preferred with about 72 percent of respondents indicating it as their favourite and this is unconnected with the fact that consumption and marketability of goat has no religious/ethnic/cultural restrictions. Next to this is poultry (53.5 percent) and the least preferred among the livestock is swine. The result further revealed that 67.7 percent of the respondents utilised part of the income generated from small ruminants’ rearing to meet the welfare needs of their members and settle unforeseen financial demands such as paying hospital bills (10.4 percent) and assisting relations in emergency situations (7.8 percent).  However, education and poverty status of respondents were found to be important determinants of revenue realised from small ruminants. Going by our findings, we therefore recommend that efforts should be geared at building capacity of respondents through education since respondents with formal education were better able to monetise their animals and get better returns. Also, sensitization on family planning and improvement on existing infrastructural facilities in the study area are very important in boosting the financial status of the women.

Click here to read the paper!