Editor's Note: Just as I was returning from an excellent but exhausting weekend running a conference for my older son's ultra-rare genetic syndrome, my younger son broke his leg. Nothing like recovering from exhaustion by spending several nights sleeping in the pull-out chair/bed in a hospital room. And then Debby arrived on the US East Coast bringing 5 to 20 inches of rain, so the raining, pouring joke I'd been making all week seemed predestined.
- Tim Ogden
The Seeing Like a faiV Edition
Editor's Note: Week 2 of the Monday experiment and things keep happening on the weekends, which makes it a bit more complicated. There won't be a faiV next week, as one of my other "side gigs" is running the Bardet Biedl Syndrome Foundation, and we have our first in-person conference since 2018 this coming weekend. I raise this here because there's an item related to that, though it's kind of outside the usual faiV envelope, below.
- Tim Ogden
The Maybe Don't Hate Mondays Edition
Editor's Note: The next in the long series of faiV experiments—we're going to start sending it out on Mondays rather than Fridays for a bit. That gives me more time on Friday to assemble and write without it coming out well past the start of Asia/Europe weekends. We'll see how that goes on my side and on the opening/clicking side for a few weeks and then, who knows?
And just in case you need a reminder of a some good news, the cheaper of the new malaria vaccines is starting to be deployed in Ivory Coast today.
- Tim Ogden
The Never Believe Me Edition
Editor's Note: I last wrote: "For now, the plan is for the next faiV to be on the 22nd, and then on May 10th." You may have noticed it's now May 17th. Sigh.
- Tim Ogden
The Regulation Edition
Editor's Note: This new world of the faiV is going out decidedly more idiosyncratically than the prior incarnation. That's mostly to do with my travel schedule, and trying to find a balance on frequency. For now, the plan is for the next faiV to be on the 22nd, and then on May 10th.
I'll link this again below to make sure that people see it, but in the last edition I inadvertently left out a link to an article about tech-driven efficiency in financial services that was central to one of the items.
I didn't realize that the theme of regulation was running through this faiV from beginning-to-end until I got to the end myself.
- Tim Ogden
FAI in the News: The New Barometer of Americans' Financial Health? $75,000
FAI’s Managing Director Tim Ogden was cited in an article in Next Avenue by Richard Eisenberg about a new study of 5,000 Americans with household incomes of less than $75,000 per year. This study was carried out by Assurance IQ, a a Prudential Financial subsidiary, and was inspired in part by the US Financial Diaries, led by FAI along with the Center for Financial Services Innovation.
The new study found that 57% of respondents aged 50 and older with incomes under $75,000 struggled to pay bills last year; that 38% couldn’t afford their health insurance deductibles; and that 31% avoided medical care due to cost. If faced with a future unexpected medical expense, 28% said they wouldn't be able to cover it without affecting their ability to pay monthly bills.
The financial volatility experienced by these households—also a main finding of the USFD study—prevents families from planning and saving for financial goals that are (or seem) far in the future.
Ogden said he wasn't surprised by Assurance IQ's findings because incomes are often highly volatile for these households. Many are either hourly workers with varying hours or in jobs that aren't steady.
"Most of what we talk about in financial planning and budgeting starts from the assumption that you know how much money you have and how much you're going to earn. But if you don't know that, how do you create a budget?" Ogden said.
…
As Ogden noted, when income is volatile, trying to plan for future expenses, like retirement costs, "is really difficult when you're worried about how much I need to save up for the six-month car insurance payment."
Online financial planning questionnaires, he said, typically assume you know your future income and spending needs.
Access the Next Avenue article (published April 4, 2024) and read the Assurance IQ study report.
The Diptych (and no Fools) Edition
Editor's Note: I had been trying to get this out early given the holiday weekend in many places, but so it goes. One of the struggles of getting out the faiV is how to connect items together in something resembling a narrative flow. For this edition, it was especially difficult as there are two "diptychs" that are related, but not wholly overlapping—and I got myself turned into knots trying to figure out how to write about them. I haven't solved the problem so much as given up on it. So forgive me for this sub-optimal presentation. If you're ready to for a happy start to your week, scroll to the end. No April Fools here. - Tim Ogden
Read MoreSmall Firm Diaries Global Findings: What We Learned, What's Next
In this webinar coming up on March 27 at 10am EDT we’ll share some data and key findings from the Small Firm Diaries. We’ll talk about related research and initiatives from around the world. And we’ll discuss the implications for what’s next on the agenda. Don’t miss this chance to join in a live discussion of findings from this first-of-its kind research study.
Read MoreThe Everything Old is New Again Edition
Editor's Note: I have a weird interest in how non-native foods become "staple" foods in other places (e.g. corn in East Africa, chilis in India), but I learned this week that Marco Polo did not bring noodles to Italy from China, and that the story was made up by an American food industry association in an attempt to promote the consumption of pasta in the United States. Now you know.
- Tim Ogden
1. faiVLive: Small Firm Diaries Global Findings, March 27th
It's seems only right that with the faiV getting back on it's feet that it's also time to bring back the faiVLive. On March 27th, I'll be joined by Paddy Carter of BII, Payal Dalal of the Mastercard Center for Inclusive Growth, Muhammad Meki from Oxford, and Hillary Miller-Wise from the Gates Foundation to talk about the global findings from the Small Firm Diaries, but that's just a jumping off point to talk about what we've learned about supporting economic growth and poverty alleviation through credit and other supports for micro and small businesses, and where we go from here in terms of both policy and research.
You can register here.
The Trifecta Edition
Editor's Note: Can it be that I can do three in a row? But don't get used to it. The faiV will be off for the next two weeks as I'm traveling. Any faithful faiV readers in Milan who might want to meet up?
I also want to thank a variety of readers who have sent me either encouraging notes on the return of the faiV or items to include in the faiV. Please do send on anything you think should be included, it really helps!
Last week's most popular link was the one about the "Death of Behavioral Economics"—indicating that I'm not the only one thinking about that, but interestingly I didn't get any feedback on what people are thinking about that. Please do share.
Finally, a personal rant that's kind of related to the first item below but only tangentially, so I'll put it here. Yesterday I logged into a webinar that I was really looking forward to based on the content that was going to be presented.
The Turn In Your Damn Reports Edition
Editor's Note: Thanks for the many kind notes on the return of the faiV last week. Let's see if I can get back in the swing of things. I am still interested in a) thoughts on how best to share the faiV, b) anything you see that should go into the faiV. So please share. Oh, and you have to read, then watch, to the end to get the Edition joke.
- Tim Ogden
1. The State of Behavioral Economics
I'll start out this item by noting my own uncertainty on this topic (a behavioral nudge!)—I'm genuinely unsure about what I should think about what is real and what is not in the world of behavioral economics. In the 10+ years I've now been hanging out in the world of economics research, I've eagerly consumed Predictably Irrational, Nudge and Thinking Fast and Slow. I've gotten excited about the possibility that small, cheap changes to the design of products and messages could have big impacts. But I've also watched with no small amount of schadenfreude as some of the core findings in behavioral science and economics have been found seriously wanting, whether from outright fraud, data manipulation, or poor research practices.
The You Seem Vaguely Familiar Edition
Editor's Note: You're not hallucinating, experiencing a weird time warp or flashback. But maybe I am.
- Tim Ogden
1. What the hell?
Yes, this is a new faiV, for the first time since [checks notes; checks notes again; checks calendar on current date; checks calendar on current date and year; hangs head in shame and disbelief] June, 2021. So, you (and I) could hardly be blamed for asking "What the hell happened?" The answer is complicated but mostly prosaic: my time has been focused on a seven-country financial diaries study, and three or four other field work projects that we've been running or participating in. But it's also that the world that the faiV existed in and was a part of has changed a lot. Here I don't mean the pandemic etc., at least not directly. I mean that the world of information creation and sharing has changed dramatically. As we contemplated reviving the faiV at various times in 2022 and 2023, we kept running into barriers like: what platform should we be using? What's getting through email filters now? How do we gather the information to write a faiV? Where are people posting now?
FAI In the News: Microfinance: Evolution at the crossroads of high tech and high touch
FAI’s Managing Director Tim Ogden was cited in an article in Philanthropy News Digest about the successes and failures of the microfinance movement, and how technology is changing the future of microlending. Ogden discussed the ongoing need for subsidy in microfinance, how to factor in the true costs of digitization, and the risk that high-tech approaches exclude the poorest and hardest-to-reach populations.
"The great success of microfinance,” said Ogden, “has been in radically increasing the number of people who have control of their own decisions because they now have access to some financial tools that enable them to choose to save, to borrow, to insure themselves, to send money, all at their choosing, rather than somebody else's. For microfinance to thrive, it needs to find a mechanism that allows for continuous subsidy and a new narrative that is more honest about the actual cost of each small investment.”
Read the entire article, by Daniel X Matz, here.
Introducing a New Study on Platform Labor in India
One frame on FAI’s research agenda is understanding the role of employment in development. How does employment help people escape from poverty? What kinds of jobs—for instance formal employment, self-employment, casual labor— are best for improving people’s wellbeing, economic and otherwise? What are the characteristics of a “good” job?
Read MoreThe Microfinance Promise: Developing Worlds Interview Part 5
In this concluding excerpt, Morduch and Labie discuss the continuing relevance of microfinance, and re-assess an influential paper authored by Morduch in 1999 called “The Microfinance Promise.” While much has changed since the paper came out, Morduch says he’d keep the title— “The sector can count incredible successes, but the biggest economic and social ambitions remain as promises.”
Read MoreMicrofinance Methodologies: Developing Worlds Interview Part 4
Morduch and Labie discuss trends in thinking around how microfinance has been delivered and funded over the past decades, including group lending, subsidies for microfinance, the tension between the need for discipline and flexibility, and how advances in technology are shaping the field.
Read MoreMicro-financing Women’s Empowerment and Rural Development: Developing Worlds Interview Part 3
Morduch and Labie take a look back at two of the original goals of the microfinance movement—empowering women, and bolstering rural development—and discuss the evidence on how well interventions have achieved those aims.
Read MoreBuzzwords in Microfinance: Developing Worlds Interview Part 2
Microfinance is a rich text for students of rhetoric. In practice, each shift in wording has brought a shift away from concerns with poverty and social justice toward finance for less poor populations.
Read MoreThe Evolution of Microfinance: Developing Worlds Interview Part 1
In a recent interview for the journal Mondes en Développement Jonathan Morduch looked back at what we’ve learned about microfinance and financial inclusion in the past decades, and shares how he thinks those lessons can shape future policies to help poor families better manage their money.
Read MoreWATCH: Plunging Into the Digital Economy, but Still Tied to Cash
In this video we created for Financial Inclusion Week, we sift through data to tell the story of businesses straddling the borderlands between the cash and digital economies after COVID-19.
Read More