The Impact of financial literacy on women’s financial wellbeing: �Experimental evidence from Uganda

Ester Agasha

CEGA Non-Residential Fellow (2021),

Lecturer at Makerere University Business School, Uganda

eagasha@mubs.ac.ug

agashaester660@gmail.com

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30^th June, 2022

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1

Motivation

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Women form majority of Uganda’ total adult population at ~54% (UBOS, 2020).

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Yet, they have limited financial wellbeing as they are more financially insecure and are far from financial independence.

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Characterized by:

• Uncertain current financial situations (Amayo et al., 2021 )

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• Difficulty coping with financial emergencies (Kass-Hanna, Lyons & Liu, 2021),

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• Financial stress (Hennegan et al., 2020)

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• Can barely make ends meet (World Bank, 2017).

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Motivation

According to the FinScope study (2018);

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What has been done?

• Government of Uganda (GoU) through Bank of Uganda (BoU) and other development partners supported several financial education initiatives to improve financial well-being.

Such as:

• The Strategy for Financial Literacy in Uganda (SFLIU)
• Rural SPEED savings Awareness Campaign
• Starting a lifetime of Savings
• Asset Africa
• Empowerment and Livelihood for Adolescents

Yet, we do not know the impact of such financial literacy initiatives groups targeted

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4

Research question

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What is the impact of a gamified financial literacy training on women’s financial behavior and financial wellbeing?

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Contribution of the study

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• The delivery of financial literacy in an interactive/engaging and hopefully more effective way through a board game based experiment.

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• Enrich the existing financial education initiatives in Uganda

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• Identifying financial education gaps and advise policy (especially the SFLIU).

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Research strategy

• The study will employ a randomized control trial to assess the impact of interactive financial literacy training.

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• The study will be restricted to the greater central region, that is, Kampala and the surrounding districts (Wakiso, Mukono, Mpigi, Buikwe and Luweero).

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• The region hosts the capital city, it is where most of the government projects are piloted first before country-wide rollout.

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Methodology

• Randomly select 3 divisions from each of the six selected districts (18 divisions).

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• From each of the 18 selected divisions, 3 parishes will be randomly selected to participate in the evaluation (54 parishes).

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• At a parish level, we shall work with the parish local council leaders (LC2) to access the lists of women groups in each selected parish.

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• Using these lists, we shall randomly select three (3) women groups to act as clusters (162 women clusters).

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• On average, there are 25 members per cluster giving a total sample of 4,050 individual participants.

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Experimental design

• The study will have two treatment arms and one control group. Each of the three groups will comprise of 54 clusters (162/3).
• Control group: Passive training
• Treatment group 1: Active training (Women only)
• Treatment group 2: Active training (Men only)
• Treatment group 3: Active training (Women + Men)

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Game Instructions

• There will be 2 sittings per month
• The game will have two sessions per sitting:
• A start up capital (initial endowment of Ugx. 3M in fake cash) will be provided
• Freedom to select an asset from the list provided (represented by a card)
• Each asset’s card has a corresponding demand shock card
• Each participant plays from period 1-5 (@ period = 1 year)
• Each gaming session will last 2 hours maximum
• Every game post will have a maximum of 5 participants

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Game instructions

• At each period is characterized by challenges that mimic real life events
• At each round, participants will be required to make financial management decisions
• Participants have the opportunity to partner with other participants, to buy off/sell assets.
• The session’s winner will be one the most returns at the end of the 5^th period
• Money at the end of the 5^th period will be turned into points
• Points will be exchanged (@ a subsidized rate) into real money

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Asset Card

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Demand shock cards

Outcomes of Focus

Regression Specification: 𝑌𝑖j = 𝛽₀ + 𝛽₁Treat Wj + 𝛽₂Treat Mj + 𝛽₃Treat M&Wj ++ γ_ij + 𝜀_𝑖j

Where;

• 𝑌𝑖j = the measured outcome of interest for individual i in group j, where:
• 𝛽₀ = a constant
• 𝛽₁ = the effect of the experimental games (Women only)
• 𝛽₂ = the effect of the experimental games (Men only)
• 𝛽₃ = the effect of the experimental games (Women + Men)
• γ_ij = the vector of covariates
• 𝜀_𝑖j = the random error

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Primary Outcomes

• Financial literacy index
• Financial behavior Index
• Financial wellbeing Index

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Heterogeneity Across

Education

Age

Marital status

Economic status

Employment status

Location

Survey & data

• Pilot-Experimental game on Abi-Trust clients (Ongoing)
• Baseline-December, 2022
• Endline 1-February, 2023
• Endline 2-June, 2023

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Quantitative- Questionnaire items adapted from previous studies (OECD, 2012; 2014; Comerton-Forde et al., 2020; CFPB, 2016)

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Qualitative- Focus group discussions for interpretation of the QUANT findings

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THANK YOU!

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