TY - JOUR
T1 - Can a Multipronged Strategy of "Soft" Interventions Surmount Structural Barriers for Financial Inclusion? Evidence From the Unbanked in Papua New Guinea
AU - Hoy, Christopher
AU - Toth, Russell
AU - Merdikawati, Nurina
PY - 2022
Y1 - 2022
N2 - We study the impacts of a comprehensive financial inclusion program in a particularly remote, insecure and low-trust setting, lacking bridging institutions to facilitate sustained interventions. We evaluate this program in Wewak district in northwest Papua New Guinea, by randomly assigning treatment to 41 of 79 villages. The program involves a 2-day financial literacy training workshop, timely offers of no-fee bank accounts with reduced administrative hurdles, and savings ‘nudges’. We use both survey and bank account administrative data to measure its impact on financial literacy, budgeting and savings behavior, as well as on the ownership and use of bank accounts. Although 25 per cent of adults in treatment villages attended the training and 70 per cent of participants opened a bank account, we do not detect any significant downstream effects. Our results draw into question the benefit of initiatives aiming to "bank the unbanked" in remote areas, revealing challenges in promoting financial inclusion among the next frontier of underserved and hard-to-reach populations.
AB - We study the impacts of a comprehensive financial inclusion program in a particularly remote, insecure and low-trust setting, lacking bridging institutions to facilitate sustained interventions. We evaluate this program in Wewak district in northwest Papua New Guinea, by randomly assigning treatment to 41 of 79 villages. The program involves a 2-day financial literacy training workshop, timely offers of no-fee bank accounts with reduced administrative hurdles, and savings ‘nudges’. We use both survey and bank account administrative data to measure its impact on financial literacy, budgeting and savings behavior, as well as on the ownership and use of bank accounts. Although 25 per cent of adults in treatment villages attended the training and 70 per cent of participants opened a bank account, we do not detect any significant downstream effects. Our results draw into question the benefit of initiatives aiming to "bank the unbanked" in remote areas, revealing challenges in promoting financial inclusion among the next frontier of underserved and hard-to-reach populations.
U2 - 10.1080/00220388.2022.2102897
DO - 10.1080/00220388.2022.2102897
M3 - Article
VL - 58
SP - 2460
EP - 2482
JO - Journal of Development Studies
JF - Journal of Development Studies
SN - 0022-0388
IS - 12
ER -