MICROCAPITAL BRIEF: Grameen Foundation, Ideas42 Seek to Influence Mobile Money Behavior in the Philippines

Two US-based nonprofits, the microfinance-oriented Grameen Foundation and the behavioral design firm ideas42 recently launched a partnership to support financial inclusion in the Philippines by implementing a combination of behavioral science principles and digital financial services provided through mobile phones. The initiative was funded by the JPMorgan Chase Foundation, the charitable arm of the US-based financial services company.

The program is aligned with the Philippines’ “National Strategy for Financial Inclusion 2015,” which is intended to increase from 43 percent the proportion of adults in the country that both have a savings account and are able to make electronic payments from their mobile phones.

Ideas42 will attempt to improve the financial products offered by microfinance organizations and encourage people to open accounts through “behaviorally-informed” solutions. One example is a “savings calendar” that allows people to see the aggregation of their savings over time, which can reinforce the custom of making regular, habitual savings deposits. The Grameen Foundation will recruit the owners of “sari-sari stores” to build a network of mobile money agents.

Nestor A. Espenilla, Jr., the Deputy Governor of Bangko Sentral ng Pilipinas said: “If the intention is to cater to unserved and underserved markets, a deeper understanding of their needs, behavior and capacities is necessary. Indeed, clients will only access and use financial services that truly address their needs. […] This kind of evidence-based process is something that we strongly adhere to in the Bangko Sentral.”

By Kevin van den Brink, Research Associate

About Ideas42

Ideas42 was founded in 2008 by Antoinette Schoar of the Massachusetts Institute of Technology, Eldar Shafir of Princeton University, Jeffrey King of the Brookings Institution, Michael Kremer of Harvard University, Sendhi Mullainathan of Harvard University, and Simeon Djankov of the International Finance Corporation (IFC) as a “think tank” geared towards solving social problems via the application of behavioral economics. As of December 2013, ideas42 reported net assets of USD 3.1 million.

About The Grameen Foundation

The Grameen Foundation, a nonprofit based in the US City of Washington, DC, provides financial, technological and managerial support to create new business opportunities and telecommunication services for poor people in rural areas. Though it is independent of the Grameen Bank, Dr Muhammad Yunus, the founder of the Grameen Bank, serves on the foundation’s Board of Directors. Grameen Foundation reported total revenue of USD 23.0 million and total assets of USD 17.2 million as of March 31, 2014.

Sources and Additional Resources

[1] Marketwired, News, “Grameen Foundation and ideas42 Launch Partnership to Expand Financial Inclusion in the Philippines

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