FAI in the News: The case for cash grants

A growing number of cities across the United States are testing out guaranteed income pilots, which give regular sums (between $100 - $1000) to primarily low-income residents. As USA Today reported on March 4, these pilots are a part of a wider discourse that supports guaranteed income as a mechanism to fight income instability, wealth inequality for low-income families, and to protect against unexpected shocks such as COVID-induced unemployment. “Guaranteed income has become more critical in the longer-term as the nation’s gig economy spawns a growing population of freelance and contract workers who don’t receive benefits and whose income fluctuates from week to week,” said FAI’s Executive Director Jonathan Morduch, who is part of the research team designing a pilot in Compton, California. . . .

Read More

Finclusion Week: Microfinance Impact from Bangladeshi Villages to Urban New Jersey

In the last 10 years researchers have generated a large handful of microfinance impact evaluations—mainly from countries in the southern hemisphere and mainly using RCT methods. In this 30-minute live video chat, Jonathan Morduch and Tim Ogden of FAI discuss connections between the studies, including the latest findings from the U.S.—a randomized evaluation of the Grameen America microcredit program in New Jersey. What can we learn from these findings? How do they shape expectations for new programs? And what do we learn for the role of microcredit in the financial lives of low-income households? Watch the recording here. . . .

Read More

faiVLive: How Low-Income Households Save—And Can We Help?

Savings has traditionally been measured by asking about “account” balances, or in national accounts by comparing incomes to expenditures. But we know that low-income households often save actively. They build up and draw down their funds throughout the year—what Nobel Laureate Angus Deaton termed “high frequency savings”—even if their balances don’t grow. Watch the recording here. . . .

Read More

FAI in the News: The shape of guaranteed income

By Jonathan Morduch and Sidhya Balakrishnan, The Hill . . .

This is a unique opportunity to imagine interventions that can best improve the situations faced by so many Americans facing financial insecurity. Understanding how different policies will address different needs is something we, along with a team of researchers from the Jain Family Institute, New York University and Princeton University (including Sewin Chan, Sara Constantino, Johannes Haushofer and ourselves) have been exploring. The details matter.
…
The current confluence of events — uprisings against racialized police violence, a global pandemic, an unfolding economic crisis — have created a desire for change. With everything else that's going on, families shouldn't also lose sleep worrying over how to meet basic needs. Cash transfers won't solve society's problems, but, with the right design, a guaranteed minimum income can be part of solutions.  . . .

Read more . . .

Resources for faiVLive: Digital Financial Services and the Future of Financial Inclusion in Latin America (en español)

La pandemia ha elevado el perfil de los Servicios Financieros Digitales (SFD), los cuales han permitido una distribución sorprendentemente rápida de los fondos de apoyo social, ofreciendo un camino para brindar servicios financieros de forma segura y a escala. Sin embargo, aún quedan asuntos importantes que considerar en cuanto al despliegue e impacto final de los SFD. ¿Quiénes están siendo excluidos? ¿Cómo podemos asegurarnos de que los nuevos actores y modelos empresariales incorporen las necesidades de las comunidades y los clientes de escasos recursos? Esta edición de faiVLive reúne a profesionales e investigadores expertos para abordar estas preguntas y debatir el camino a seguir para los SFD y la inclusión financiera en América Latina. El webinar tuvo lugar el 15 de septiembre. Todavía se puede acceder a la grabación aquí. . . .

Read More

FAI In the News: 4 Simple Ways to Take Control of Your Coronavirus Budget

The story of Becky and Jeremy Moore (names changed) from Financial Diaries was recently cited in a New York Times article about budgeting during the coronavirus. Becky and Jeremy’s story illustrates one major lesson from the Financial Diaries study of 2012–2013 — that financial insecurity is not simply a result of not having enough money, but rather of not having money at the right time, when it is needed. Financial Diaries documents how income volatility affects millions of Americans in different ways, from working on commission to unpredictable work hours, making it all the more difficult to set aside enough cash to weather a global pandemic. . . .

Read More

Migration and Household Finances: How a different framing can improve thinking about migration - A podcast featuring Tim Ogden

In this podcast, produced by the Development Policy Center at Australian National University, Tim Ogden discusses a necessary new lens for research on migration and household finances, based on a paper co-authored with Micheal Clemens. Typically, migrant remittances have been treated as windfall income by policy makers and researchers. However, from a family’s perspective, remittances from a relative overseas are a return on investment. Thus, migration itself is a strategy for financial management. . . .

Read More

Hopes and Fears for the Future of Digital Financial Services: Views from Five Experts

From the start of the outbreak, digital finance providers were seen as a solution to some of the effects of COVID-19. Mobile money providers potentially offer a safer alternative to cash and some governments immediately turned to digital solutions to distribute much needed cash relief. That digital providers offered creative solutions under pressure is laudable, but perhaps not surprising, as most digital services are born from an opportunity to improve a dysfunctional system. . . .

Read More

Register for the next faiVLive, June 26 | Digital Financial Services, Inclusion, Exclusion and the Future of Pro-Poor FSPs

The pandemic has raised the profile of digital financial services, which have enabled amazingly rapid distribution of social support funds and may provide a path forward for delivering financial services safely and at scale. But there are important questions left to consider about the roll-out and ultimate impact of DFS. This edition of faiVLive brings together expert practitioners and researchers to address these questions, ranging from the impact of DFS on MFIs to digital security. . . .

Read More

How resilient are we? A dive into the global data on how people deal with unexpected shocks

By Michelle Kempis and Jonathan Morduch . . .

As the current pandemic pushes the global economy to the brink, we decided to take a look at what surveys say about how well households plan to deal with big emergencies. . . .

The only truly global data we know are from the World Bank’s Global Findex survey. The Findex reports on household surveys from 140 countries, and it greatly enriches what we know about financial inclusion. One section is devoted to asking how respondents would cover a large emergency equivalent to 1/20th GNI of per capita. It’s an under-exploited resource—but see this and this —and a bit tricky to interpret. . . .

Read More