J-PAL’s Finance sector seeks to understand how access to financial services can reduce poverty and spur economic development by helping households smooth consumption, make investments, and manage risk. Our policy insights below summarize general lessons from randomized evaluations on increasing access to capital through microcredit and spurring self-employment through a multi-faceted approach for the extreme poor.
Low-income households need effective financial tools to help manage and grow their money. Yet many of the financial services they can access are costly, unsafe, or not well-suited to their needs. To support financial inclusion efforts around the world, the Financial Inclusion Program at IPA partners with service providers, governments, and researchers to design and rigorously test financial services and programs encouraging healthy financial behavior among the poor.
Research by J-PAL affiliates found that improvements to the method for transferring public benefits in India reduced program expenditure by 24%.
J-PAL affiliate Dina Pomeranz and coauthors found that peer groups helped Chilean micro-entrepreneurs save more.
J-PAL affiliates and coauthors are launching a randomized evaluation of universal basic income in Kenya.
Previous research found that microcredit does not substantially improve borrowers’ income or social well-being, but less evidence exists on the impact of larger loans.
Bandhan-Konnagar's multifaceted Graduation Program has been evaluated by J-PAL affiliates and found to be effective at providing pathways for the poorest to graduate out of extreme poverty.