Working for Mastercard Foundation, MSC conducted a research exercise in Ghana, Kenya, Senegal, and Uganda with youth and digital financial service providers to understand the perception of youth and the state of jobs in DFS. We supported Lynk to develop microinsurance product concepts and The Expresso Innovation Hub to improve its incubation approach with youth entrepreneurs in Senegal. Thereafter, Lynk started insuring about 1,000 workers each day, and our work with Expresso has been customized to deliver value to its 3.2 million subscribers.
Corner shop diaries
Tracking daily financial transactions of corner shop owners can provide critical insights into how they manage their finances, both at the level of their household and their business. Interactions with corner shop owners can also generate important insights on:
- The use of digital finance by micro-businesses and LMI segments;
- How the demand for various items of daily use has changed during the pandemic;
- How micro-businesses managed their businesses during this time;
- What challenges they faced and currently struggle with;
- What worries they have regarding their future or change in their overall wellbeing, etc.
MSC, with technical support from L-IFT, has been implementing a year-long research study in which we track the daily financial life of 50 corner shops in India and Indonesia. This project is part of the larger collaborative initiative between MSC and L-IFT in Asia and Africa on a research study on corner shops.
We use three distinct research methodologies in this study:
- Financial Diaries method to track the daily financial transactions of businesses and households;
- High-frequency micro-surveys;
- In-depth qualitative interviews of corner shop owners.
India
In India, we have been tracking 25 corner shops: five each in the states of Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, and West Bengal. Of these 25 corner shops, nine are run by women. Our sample comprises 10 grocery or provisions stores, two hair salons and cosmetics shops, three CICO agents, four tailors and cloth ironing shops, three mobile shops and cyber cafés, one eatery, one online store that sells religious items, and one medical store. The data collection in India started in late October, 2020.
Indonesia
MSC has been managing the data collection in Indonesia. We have been tracking 25 corner shops in Wonosobo and Temanggung in Central Java. Of these, 19 are run by women. Our sample comprises 20 grocery and provisions stores, one salon, three CICO agents, and one mechanic. The data collection in Indonesia started in late October 2020.
Research on the current use of financial services and challenges among RMG factory workers in India
BSR commissioned MSC to conduct detailed quantitative research as a follow up to its preliminary qualitative research. The objective was to understand the difference in terms of gender with regard to the financial needs, behaviors, and challenges of RMG factory workers.
The research framework had two major pillars. The first was around access to financial products and services and their use, opportunities, and challenges for women garment workers as compared to their men counterparts. The second pillar covered the intended and unintended consequences of better financial inclusion, such as social behavior, financial decision-making in the household, savings and investment behavior, borrowing behavior, among others.
MSC conducted a secondary review of the Digital Financial Services (DFS) landscape, especially in the context of women in RMG factories. We conducted a quantitative study to understand the usage and adoption of DFS products and channels among RMG workers and disaggregated the analysis in terms of gender.
The findings indicated that women workers in the RMG factories have an active financial life but are more likely to struggle to operate their accounts at both ATMs and bank branches. The study also noted a significant gender gap in mobile ownership and mobile literacy—the entry points to the adoption and usage of DFS. Only a few women used services other than basic calls and SMS on their mobiles. Their uptake of financial services through mobiles was lower than that of men. Subsequently, MSC and BSR conducted a learning workshop together to disseminate the findings to the stakeholders.
Evaluation of the DBT in Fertilizer program of the Government of India
On the request of the Government of India’s policy think tank, NITI Aayog, MSC conducted a nationally representative study on Direct Benefits Transfer (DBT) in fertilizer across four consecutive rounds concurrent to the scale-up of the program. DBT is a program that the Government of India launched to transfer the benefits and subsidies of various social welfare programs directly in the bank account of the beneficiary. The objective of the fourth round of the study was to understand the on-ground implementation status of the pan India roll-out of the Aadhaar-enabled fertilizer distribution system. The study assessed the effectiveness of the roll-out when the demand is at its peak, specifically during the Kharif season (July to October), and looked at the issues and challenges in implementation.
For the study, MSC adopted a mixed-methods study design comprising quantitative and qualitative components. The quantitative research was designed to provide national and state-level point estimates about key indicators on the status of implementation. The research used a nationally representative sample of 11,281 farmers and 1,182 retailers from 54 districts of 18 states.
The study highlighted that in the first year of operations, the DBT-Fertilizer program helped the Government of India save USD 1.54 billion. The preference for a system based on Aadhar (India’s digital identity system) has increased among the farmers but it has remained constant among retailers. The study also led to specific recommendations on technology and operations, among others.
Impact evaluation of Program Keluarga Harapan (PKH), Indonesia
MSC conducted a rigorous impact evaluation of Program Keluarga Harapan (PKH), Indonesia’s flagship conditional cash transfer (CCT) program, to generate practical insights for the Ministry of Social Affairs (MoSA). The evaluation assessed the impact of PKH on key welfare outcomes, which included household consumption, education, and health-seeking behaviors. It also explored beneficiary perceptions of the remodelled delivery mechanism that shifted payments to bank accounts.
Alongside impact metrics, MSC assessed operational efficiency and user experience around the new bank-based delivery system. This provided MoSA with a more comprehensive idea of implementation bottlenecks and opportunities to strengthen systems.
MSC used a mixed-methods approach with a modified regression discontinuity design (RDD) to ensure impactful, counterfactual analysis. The quantitative component included surveys with 1,466 beneficiaries and 1,437 non-beneficiaries from Indonesia’s Unified Beneficiary Database (UDB). The qualitative research featured 24 in-depth interviews with beneficiaries and program facilitators to capture behavioral and perceptual nuances often missed by survey data.
The evaluation revealed that PKH beneficiaries had an increase of 3.8% in total monthly expenditures compared to non-beneficiaries, with an increase of 11.8% for non-food expenditures. Although beneficiaries spend less on education and health, the differences were statistically insignificant. These numbers suggested potential substitution effects or delayed behavioral responses.
The Ministry of Social Affairs (MoSA), Indonesia, commissioned the project.
Analytics of the supply side data to evaluate the progress and challenges of the digital credit sector in Kenya
MSC was commissioned by the Social Performance Task Force (SPTF) and The Smart Campaign to develop a research report to understand the changes in the ecosystem of digital credit in Kenya. The study consolidated key findings from the analytics of supply-side data. The analytics was supplemented by insights from the demand-side qualitative research and secondary research. We also gathered customer insights like user experience with the product obtained through a mock-application review exercise.
We analyzed the data analytics used anonymized supply-side data from 14 suppliers including banks, MNO-linked banks, MFIs, and FinTechs that offer digital loans. The merged dataset contained 19 million loan details on 6.7 million unique borrowers. Our process generated results at the aggregate level to eliminate the possibility of having any insights interpreted differently.
The insights suggest that the number of digital loans issued has approximately doubled in the past two years. A few other key insights are as following:
Based on study findings, MSC’s recommendations ranged from data reporting and quality, customer protection, identity fraud, defaults of low-value loans to the loan pricing, and over-indebtedness of consumers, among others. Our team along with SPTF hosted webinars in English, Spanish and French to generate discussion on the key findings.