Taking Financial Access to Remote and Insecure Areas: Impacts of a Comprehensive Financial Inclusion Intervention in Papua New Guinea

54 Pages Posted: 28 Dec 2020

See all articles by Christopher Hoy

Christopher Hoy

World Bank

Russell Toth

School of Economics, University of Sydney

Date Written: October 26, 2020

Abstract

We study the impacts of a comprehensive financial inclusion program in a particularly remote, insecure and low-trust setting, lacking bridging institutions to facilitate sustained interventions. We evaluate this program in Wewak district in northwest Papua New Guinea, by randomly assigning treatment to 41 of 79 villages. The program involves a two-day financial literacy training workshop, timely offers of no-fee bank accounts with reduced administrative hurdles, and savings ‘nudges’. We use both survey and bank account administrative data to measure its impact on financial literacy, budgeting and savings behaviour, as well as on the ownership and use of bank accounts. Although 25% of adults in treatment villages attended the training and 70% of participants opened a bank account, we do not detect any significant downstream effects. Our results draw into question the benefit of initiatives aiming to ‘bank the unbanked’ in remote areas, revealing challenges in promoting financial inclusion among the next frontier of underserved and hard-to-reach populations.

Keywords: financial inclusion, Papua New Guinea, financial literacy, budgeting, savings behaviour, hard-to-reach populations

JEL Classification: D14, O1

Suggested Citation

Hoy, Christopher and Toth, Russell Dean, Taking Financial Access to Remote and Insecure Areas: Impacts of a Comprehensive Financial Inclusion Intervention in Papua New Guinea (October 26, 2020). Development Policy Centre Discussion Paper No. 89 (2020), Available at SSRN: https://ssrn.com/abstract=3718809 or http://dx.doi.org/10.2139/ssrn.3718809

Christopher Hoy (Contact Author)

World Bank ( email )

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Russell Dean Toth

School of Economics, University of Sydney ( email )

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Australia
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HOME PAGE: http://sydney.edu.au/arts/economics/staff/academic/russell_toth.shtml

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