Changing saving and investment behavior: the impact of financial literacy training and reminders on micro-businesses

Girum Abebe, Biruk Tekle and Yukichi Mano
Authors registered in the RePEc Author Service: Biruk Tekle Gebreyohannes

No 2016-08, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: In developing countries, savings is an important financial tool, particularly for micro-business with limited access to credit. However, micro-entrepreneurs often undersave, even when they have some surplus and the desire to save maybe because of knowledge gap and behavioral biases. To test the importance of these saving constraints, we offered four-hour financial literacy training and periodic SMS reminders for three months to randomly selected group of micro-entrepreneurs in Addis Ababa, Ethiopia.. While financial literacy training alone seemed ineffective, we find that reminders and joint treatment encouraged better saving behavior. Our results confirm earlier findings that savings can be limited by attention, whereas how entrepreneurs manage savings depends on their levels of financial literacy.

Keywords: savings; reminders; financial training; entrepreneurs (search for similar items in EconPapers)
JEL-codes: D92 E21 L26 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ent, nep-mfd and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Changing Saving and Investment Behaviour: The Impact of Financial Literacy Training and Reminders on Micro-businesses (2018)
Working Paper: Changing saving and investment behavior: the impact of financial literacy training and reminders on micro-businesses (2015)
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