Research & Analysis
Publication

Using Behavioral Science

There has been growing momentum to design financial and nonfinancial services for lower-income populations around the world that would meet the specific needs of these clients. CGAP’s “Clients at the Center Financial Inclusion Research Fund” (Fund) has been playing a catalytic role by supporting research focusing on understanding clients’ needs and delivering services that respond to these needs. CGAP engaged ideas42, a behavioral design firm, to apply its research methodology, which is founded in behavioral science, to conduct a qualitative research on how microentrepreneurs approach, decide, and act on key business and financial management issues. ideas42 will use the insights from the research, summarized in this report, to develop and refine the content and features for the next iteration of its Financial Heuristics financial management training product for microentrepreneurs. This improved product will help microentrepreneurs successfully manage their businesses and, in turn, enhance the financial well-being of their families.

This report provides a comprehensive summary of the objectives of the research, the behavioral methodology used for the qualitative research conducted in India and the Philippines, and key findings on how microentrepreneurs manage their finances. Section 1 provides the conceptual framework for the Financial Heuristics work and outlines the historical development of ideas42’s Financial Heuristics portfolio. Section 2 describes the specific objectives of the client-centric research. Section 3 presents ideas42’s proprietary behavioral mapping methodology that was used to conduct interviews with clients of microfinance institutions (MFIs) in India and the Philippines. Section 4 summarizes the key findings from the client research on microentrepreneurs’ business and financial management practices (in the Philippines) and the client experience with the Financial Heuristics business management training product (in India). Section 5 concludes the report and outlines the key next steps for finalizing the Financial Heuristics scale-up project in August 2017, funded by USAID’s Development Innovation Ventures (DIV) program.

Regions:
East Asia and Pacific, South Asia
Countries:
India, Philippines

Related Research

Publication

Empowering Small Giants: Inclusive Embedded Finance for Micro-retailers

Financial inclusion is becoming more feasible for many excluded and underserved micro-retailers, thanks to the emergence of new B2B e-commerce companies that are digitizing the final stage of the fast-moving consumer goods (FMCG) supply chain. This report outlines various business models that incorporate last-mile retailers into digital ordering platforms, offering them convenience, transparency, and a wide range of products.
Publication

The Role of Data in Inclusive Insurance

With 3.8 billion people in emerging markets lacking adequate insurance coverage, data plays a crucial role in enabling insurers to comprehend these segments' specific needs and risk profiles. This, in turn, helps develop more accurate risk assessment and pricing models for inclusive insurance offerings.
Publication

The Building Blocks Supporting Open Finance

This working paper introduces the concept of an inclusive data ecosystem as one where low-income people’s data trails are used to improve their financial inclusion. The paper highlights open finance as a catalyst for inclusive data ecosystems and identifies key enabling layers that drive the success of open finance and, by extension, an inclusive data ecosystem.