DPhil student Janina Steinert introduces her new article in the Journal of Development Economics:
Over the recent years, financial literacy programmes have become a popular development for helping poor people manage income volatility and securing their consumption levels over time. However, meta-analyses suggest that they have very limited effectiveness when it comes to changing recipients' financial behaviour and improving their economic situation.
So we decided to test the impact of an innovative new curriculum - the Sinovuyo Teen programme - which embeds a brief financial literacy training into a wider evidence-based parenting intervention. In a field experiment with 552 families in the Eastern Cape province of South Africa, we randomly selected 20 villages/townships to receive the Sinovuyo Teen programme and the remaining 20 to serve as the control gorup.
At 5-9 months post-intervention, we have found that participants in the treatment group have significantly changed their financial behaviours: They save more and borrow less, particularly from moneylenders. We also observed significant decreases in levels of financial distress, improved resilience to income shocks, and better access to a range of basic necessities, including education, medical care, and clothing. We further found indication that the programme's impact is driven by psychological and social factors, namely higher self-efficacy, optimism, and emotional support.
Our paper concludes that financial literacy training may benefit from more holistic, psychosocial programme designs. Read all about it here.