• What we do
  • The People
  • About Us
  • Why Innovation Africa
  • Contact Us
Innovation AfricaCreating the Future Today
  • Feature Articles
  • Innovation
  • Agriculture
  • ICT
  • Technology
  • Entrepreneurship
  • Health
  • Store
  • Contact Us
Menu
  • Feature Articles
  • Innovation
  • Agriculture
  • ICT
  • Technology
  • Entrepreneurship
  • Health
  • Store
  • Contact Us
  • Mind, Society, and Behavior – and Financial Inclusion

    February 6, 2015 Editor 0

    Like many World Bankers, I took some time recently to look through the newly released 2015 World Development Report “Mind, Society, and Behavior.” From my perspective, in the Finance and Markets Global Practice, one thing jumped out immediately: The report is packed with insights that are directly relevant to our work on financial inclusion.

    In the Overview alone, the reader is met with an abundance of findings related to consumer protection, financial capability, savings and other key topics involving financial inclusion (grouped together under the theme of “household finance,” which is fully explored in Chapter 6). We’re told of how changes to the framing of payday-loan terms dramatically altered borrowing behavior in the Unitedc States; how embedding financial messages in an engaging television soap opera in South Africa improved the financial choices of viewers; and how SMS reminders increased saving rates in Bolivia, Peru and the Philippines.

    Of course, this is not the first body of work to summarize key behavioral lessons learned from decades of careful research on financial inclusion: See, for example, Chapters 6-9 of Banerjee and Duflo’s Poor Economics or the Bank’s 2014 GFDR on Financial Inclusion.) But these examples do help drive home the key message of the report: Paying attention to how people think, and to how history and context shape their thinking, can improve the design and implementation of development policies and interventions that target human behavior.

    The report highlights that psychological impulses such as present bias, loss aversion and cognitive overload can lead to poor financial decision-making. For those in or on the edge of poverty, the ramifications of these poor decisions – low savings, chronic over-indebtedness, investment shortsightedness – can be devastating. We are reminded that most adults in developing economies do not benefit from the sophisticated financial tools such as automatic salary deposits, mandatory retirement contributions, or default insurance programs that help mitigate the effects of automatic thinking.

    Yet, as outlined in Chapter 6, there are a range of interventions that have been shown to help address behavioral constraints on financial decisions in a developing-country context. Many of those interventions take advantage of what we know about the natural processes of the mind, using techniques such as framing, default settings and emotion persuasion to nudge people toward better financial decisions.

    Go to Source

    Related Posts

    • Key lessons for policymakers from China’s financial inclusion experienceKey lessons for policymakers from China’s financial inclusion experience
    • Leveraging ‘suptech’ for financial inclusion in RwandaLeveraging ‘suptech’ for financial inclusion in Rwanda
    • Can ‘fintech’ innovations impact financial inclusion in developing countries?Can ‘fintech’ innovations impact financial inclusion in developing countries?
    • Championing interoperability for financial inclusion: carrot or stick?Championing interoperability for financial inclusion: carrot or stick?
    • New G20 White Paper explores the fast-evolving role of standard-setting bodies for financial inclusionNew G20 White Paper explores the fast-evolving role of standard-setting bodies for financial inclusion
    • Unlocking innovation in the Middle East through financial inclusionUnlocking innovation in the Middle East through financial inclusion
    Sovrn
    Share

    Categories: World Bank PSD

    Tags: financial inclusion, World Development Report

    Determinants of customer relationship marketing success in Islamic retail banking Tumbleweed rolls through West African resorts: Ebola and tourism crisis management

    Leave a Reply Cancel reply

    You must be logged in to post a comment.

Subscribe to our stories


 

Recent Posts

  • Entrepreneurial Alertness, Innovation Modes, And Business Models in Small- And Medium-Sized Enterprises December 30, 2021
  • The Strategic Role of Design in Driving Digital Innovation June 10, 2021
  • Correction to: Hybrid mosquitoes? Evidence from rural Tanzania on how local communities conceptualize and respond to modified mosquitoes as a tool for malaria control June 10, 2021
  • BRIEF FOCUS: Optimal spacing for groundnuts in smallholder farming systems June 9, 2021
  • COVID-19 pandemic: impacts on the achievements of Sustainable Development Goals in Africa June 9, 2021

Categories

Archives

Popular Post-All time

  • A review on biomass-based... 1k views
  • Can blockchain disrupt ge... 764 views
  • Apply Now: $500,000 for Y... 760 views
  • Prize-winning projects pr... 717 views
  • Test Your Value Propositi... 706 views

Recent Posts

  • Entrepreneurial Alertness, Innovation Modes, And Business Models in Small- And Medium-Sized Enterprises
  • The Strategic Role of Design in Driving Digital Innovation
  • Correction to: Hybrid mosquitoes? Evidence from rural Tanzania on how local communities conceptualize and respond to modified mosquitoes as a tool for malaria control
  • BRIEF FOCUS: Optimal spacing for groundnuts in smallholder farming systems
  • COVID-19 pandemic: impacts on the achievements of Sustainable Development Goals in Africa
  • Explicit knowledge networks and their relationship with productivity in SMEs
  • Intellectual property issues in artificial intelligence: specific reference to the service sector
  • Africa RISING publishes a livestock feed and forage production manual for Ethiopia
  • Transforming crop residues into a precious feed resource for small ruminants in northern Ghana
  • Photo report: West Africa project partners cap off 2020 with farmers field day events in Northern Ghana and Southern Mali

Tag Cloud

    africa African Agriculture Business Business model Business_Finance Company Crowdsourcing data Development East Africa economics Education Entrepreneur entrepreneurs Entrepreneurship ethiopia ghana Health_Medical_Pharma ict Information technology Innovation kenya knowledge Knowledge Management Leadership marketing mobile Mobile phone nigeria Open innovation Organization Research rwanda science Science and technology studies social enterprise social entrepreneurship south africa Strategic management strategy tanzania Technology Technology_Internet uganda

Categories

Archives

  • A review on biomass-based hydrogen production for renewable energy supply 1k views
  • Can blockchain disrupt gender inequality? 764 views
  • Apply Now: $500,000 for Your Big Data Innovations in Agriculture 760 views
  • Prize-winning projects promote healthier eating, smarter crop investments 717 views
  • Test Your Value Proposition: Supercharge Lean Startup and CustDev Principles 706 views

Copyright © 2005-2020 Innovation Africa Theme created by PWT. Powered by WordPress.org