Centre for Micro Finance (CMF) IFMR Research - Chennai

1. Centre for Micro Finance (CMF) IFMR Research - Chennai

2. Centre for Microfinance The Centre for Micro Finance (CMF) is a non-profit, non-partisan research centre housed within the Institute for Financial Management and Research in Chennai. The mission of the Centre for Micro Finance is to improve the accessibility and quality of financial services for the poor through rigorous research, knowledge dissemination, and evidence-based policy outreach.

3. Organization’s Approach • Develops research ideas and research design to conduct studies using rigorous methodology. - Impact Evaluation using RCTs - Short-term Policy Research - Panel Studies - Short-term research like a snapshot/ case-study • Partners with key stakeholders in an effort to translate research/ evidence based results into Policy and Practice. - Disseminating results through various publications and in person meetings with key stakeholders - Conducting conferences and Round-table discussions • Conducts trainings and workshops for students and practitioners on research tools and methodology.

4. Partners CMF engages with a wide variety of institutions to carry out its mission • Implementation Partners: AIC, Bandhan, Hand-in-Hand, KGFS, Mann Deshi, Saath, SEWA, Sonata, Spandana, and several others. • Policy Research Partners: BIRD-NABARD, Ministry of Finance, CAB-RBI • Institutional Research Partners: Harvard, MIT, IIM(C), Yale, IPA, J-PAL, RAND, Wharton, Stanford, World Bank • Principle Investigators: Abhijit Banerjee, Esther Duflo, RohiniPande, Erica Field, Shawn Cole, Jeremy Tobacman, KarnaBasu, SantoshAnagol • Principle Funders: Ford Foundation, 3ie, National Science Foundation, Gates Foundation, USAID, AUSAID, DFID, World Bank, LSE, MIT

5. Areas of Research CMF undertakes quantitative and qualitative research in 4 broad areas. 25+ projects at various stages of development are currently under way across the country. These areas are: • Financial Inclusion • Livelihoods • Social Objectives • Regulation and Policy WWW.CENTRE-FOR-MICROFINANCE.ORG/RESEARCH-PROJECTS

6. Research Methodology?

7. Methodology for Impact Studies • Estimate the Sample size • Identify the Sample • Conduct Baseline • Randomize • Provide Intervention • Observe • Conduct Endline • Analyze

8. Examples of Impact Studies • Impact Evaluation of the self help group (SHG) model • Impact Evaluation of KGFS Rural Bank model • Value of Distributing Treated Bed Nets via microfinance • Health Insurance Combined with Micro-credit • Impact Evaluation of Rural Micro-credit and women's empowerment • AvaajOtalo: Investigating the impact of a mobile-based Agricultural Extension Service

9. Examples of Short Term Policy Research • Understanding the uptake and willingness to pay for a bundled Social Security Product (Study with Ministry of Finance-GoI and GIZ) • Evaluation of PudhuVaazhvu (Skills Training Programme) of Government of Tamil Nadu • Mapping the performance of Livelihood Promotion Groups in the states of Madhya Pradesh, Rajasthan and Tamil Nadu (World Bank and FAO) • Understanding the Financial Viability of Business Correspondence Model and Clients’ Perspective. (BIRD-NABARD) • Analysis of the Performance of No-Frills Accounts (CAB-RBI)

10. Case of Financial Literacy

11. Push of Financial Inclusion

12. Other Initiatives • Moving towards technology • Intermediate Brick and Mortar banking structures • Satellite offices in the form of ultra small BC outlets • Promoting Financial Literacy

13. Barriers to Financial Inclusion • Access related like Distance, Documentation etc. • Low Literacy Levels • Lower comprehension of complex financial landscape • Inadequate trust on products and services • Fear from technology

14. Role of Financial Literacy • Establishing need • Creating awareness and reducing information asymmetry • Building trust • Improvise decision making process

15. Centre’s Role in Studying Financial Literacy • RCTs (Experimental) -Impact Evaluation of Savings Training on Microcredit Clients in Rural India -The effect of financial literacy training on personal financial decision making • Non-Experimental -Impact of Financial Literacy when imparted to BC clients • Qualitative -Evaluation of Financial Literacy Training Programmes in India

16. Results so far.. • Knowledge and awareness (about savings and insurance) of people increases but behavioural impact has not been witnessed • Demand driven recorded messages had good take up among farmers • Reinforcing using Individual Counselling helps as people question their decision making • Trainees perceive a higher level of comprehension of financial concepts • “One size fits all” principle should not be used • “Teachable moments” need to be exploited

17. Results so far.. (Contd..) • Usage of no-frills savings account by the treatment group significantly increases in the post intervention period • Pensions and Insurance, the topics of prime importance, are not focused upon • It is believed that complementing financial literacy with some livelihood programme would increase the take up and influence of the former • List of all the best practices, innovative ways (like setting up a financial literacy hub, use of recorded messages, daily tricks to save) and relevant suggestions have been documented

18. Results so far.. (Contd..) • Illiterate people might not possess good numeracy skills but they are good with money • Complexity spoils it all • Trust increases the up-take

19. Scope of Collaboration with XIMB • Academia -Partners in Policy Based Action Research on Livelihood in Chhattisgarh, Bihar and Tamil Nadu -Principle Investigators on experimental and non-experimental studies of CMF • Curriculum -Contribute in designing development related course curriculum -Share case studies on livelihoods to be used in the courses • Students -Recruitment of potential Research Associates -Providing training/ guest lectures in research tools & statistical package (STATA)

20. Thank you