Rules of Thumb: Providing Timely Financial Management Advice at Scale in India

Microentrepreneurs in developing countries face complex financial management challenges. Many entrepreneurs do not have the financial skills to address these challenges and traditional classroom-based financial training has not been shown effective in changing behavior or improving financial outcomes. What is the most effective way to equip microentrepreneurs with the necessary skills to address their financial management challenges? Traditional financial education curricula have shown very mixed results for improving knowledge and financial practices among microentrepreneurs. In this study, the researchers build on earlier work by one of the authors that shows the promise of using a simple, heuristics-based financial education curriculum. In the current project the researchers test whether it is feasible to communicate these heuristics via mobile phone messages in a scalable and sustainable fashion. Carefully designed messages that are simple to understand and adopt will be sent at particularly useful times to optimize effectiveness. The study will measure the impact of this strategy on the financial management behavior and business outcomes of microentrepreneurs.

Policy implications 
Cole, S., Schoar, A. (forthcoming). 'Rules of Thumb: Providing Timely Financial Management Advice at Scale in India'. Ongoing research.