June 10, 2014
June 6, 2014
1. Financial Inclusion: As part EMERGE: The Forum on Consumer Financial Service Innovation, attendees got a taste of what it is like (including how expensive it is) to be unbanked. ...
June 2, 2014
Popular financial advice guru Dave Ramsey has long advocated for what he calls the “debt snowball” approach to repaying debt for financially stressed households: order your debts by amount, smallest to largest, and repay them in order, ignoring interest rates. This sounds decidedly unscientific, and from a classical economics perspective it is bad advice. Rational actors should settle debts with highest interest rates first, regardless of the size of debt, in order to...
May 30, 2014
1. Cash Transfers: Opponents of cash transfers argue the poor waste their funds on alcohol and tobacco. But a review of 44 estimates of consumption across 19 studies and 13 interventions does not show evidence of increased spending on these goods. The World Bank - Development Impact Blog...
May 29, 2014
In April Walmart announced the launch of a new money transfer service. I did a double take on the service's low price: $9.50 to send up to $900 from one Walmart store to another – that’s as much as $66.50 cheaper than the price of competing services at Western Union and Money Gram.
This is just the latest example of Walmart's foray into the financial services industry. In 2012...
May 28, 2014
Among the useful insights from behavioral economics (or behavioral science, if you prefer) is a greater understanding of the difficulties everyone faces following through on our good intentions to save for the future. People routinely say that they would like to save more—to build a cushion, for retirement, for a future vacation—but when the time comes to put money away, it gets spent instead.
Some of the...
May 23, 2014
1. Remittances: Why have such rapid increases in remittances not resulted in noticeable improvements in economic growth in the recipient countries? Michael Clemens and David McKenzie investigate possible answers in a new working paper. The World Bank -...
We at FAI have been closely following work on financial education and financial literacy to better understand whether financial education can improve financial capability. So far, the evidence has been mixed at best. A recent meta-analysis, largely focused on the United States, finds overall little evidence for impacts of financial literacy education on financial behaviors, and effects that attenuate over time.
May 21, 2014
In January, the Wall Street Journal reported that banks are to closing brick-and-mortar branches “at a record rate,” as new technologies and financial pressures drive them to transition many of their services to digital equivalents or ATMs. But against this broader backdrop of bank closings, the market is both fragmenting and polarizing, as a handful of...
May 16, 2014
1. Bank Transparency: Wal-Mart is known as a low-cost retailer, but customers of the independent banks inside its outlets are among America's highest payers of bank fees. The 5 banks with the most Wal-Mart branches ranked among the top 10 in fee income as a percentage of deposits in 2013. The Wall Street...