The Role of Financial Access, Knowledge and Service Delivery in Savings Behaviour and Welfare in Bihar

The Role of Financial Access, Knowledge and Service Delivery in Savings Behaviour and Welfare in Bihar


Over the past decade, the Indian government has made a commitment to increasing financial inclusion and the sector servicing the unbanked clients has witnessed unprecedented growth. Yet many sections of the population still do not have access to financial services- for example 41% of the adult population does not have a bank account. Further, critical gaps remain in our understanding of how can different banking models (microfinance, business correspondents, door-step banking and so on) be best used to fight poverty. Questions that remain unanswered include: Which financial products have the most impact on the lives of those who take them up? Can the impact of different banking models be enhanced by adding non-financial programmes such as financial literacy training?

EKO program is one of the few institutions to offer “doorstep” banking and financial services. Most of the villages in which EKO operates have little or no access to banks. To solve these access issues, EKO utilizes a savings program located within the villages. EKO’s delivery mechanism is unique in the sense that the EKO agents, known as the Customer Service Providers (CSPs), undertake the banking transactions in the premises of their primary occupation (attached to his primary business, mostly in a prime location within the village). Thus, the revenues generated by the CSPs are basically supplementary income, rather than being primary income, which makes it a viable business option.

This assignment has four main objectives.

  • The first objective is to explore the issue of access to financial services and to investigate the distinctive features of the delivery mechanism currently being implemented by an organization like EKO.
  • The second objective is to assess the impact of financial literacy education (FE) program, which will be provided by CMF over a 12 week period on treatment villages. Besides the standard classroom FE program, two additional components will be evaluated – the first will assess the impact of low cost reminders and follow-ups after the initial FE to ensure that the information imparted to individuals is retained; the second will assess whether offering FE to two members who often jointly make household finance decisions could influence financial wellbeing.
  • The third objective is to assess the effectiveness and efficiency of the FE program through a Process Evaluation (PE) component. Evaluations will be conducted primarily through focus groups and interviews of trainers and participants in the FE program. The evaluations will assess the strength and structure of FE program – including training delivery, participant experiences, and participant knowledge.
  • The fourth objective is to compare an on-going financial training evaluation that is currently being undertaken in Uttar Pradesh by FINO, where FINO also offers “doorstep” banking. This new evaluation will thus be able to greatly expand our understanding of “doorstep” banking programs as carried out by FINO and EKO, especially when accompanied by financial literacy.

CMF, in partnership with the World Bank, will conduct this impact evaluation in six districts of Bihar. The areas of impact that we will focus on include change in financial literacy knowledge, such as knowledge about the value of saving and how to save; behaviours, including day-to-day financial management; whether a person has opened a bank account, including making deposits for savings; whether a person has contracted loans and the associated changes in welfare as measured by productive assets and consumption.


Methodology and Research Design

This study, a randomized controlled trial, assigns EKO CSPs randomly to either treatment or control groups. The following treatment and control groups exist:

  • Treatment 1 – Customers receiving access to EKO services and the classroom FE. 45 treatment 1 CSPs, with a total of 1350 clients.
  • Treatment 2 – Customers receiving access to EKO services and two members of the household receiving classroom FE. 45 treatment 2 CSPs, with a total of 1350 clients.
  • Treatment 3 – Customers receiving access to EKO services, the classroom FE and an intensive follow-up through household visits and text messages. 45 treatment 3 CSPs, with a total of 1350 clients.
  • Control – Customers receiving access to EKO services only. 45 control CSPs, with a total of 1350 clients.

The total sample size will have 180 CSPs in control and treatment, with a total of 5400 clients.



CMF is currently designing easy-to-understand yet comprehensive FE modules consisting of the following topics – understanding importance of savings, setting long term and short term savings goals, analysing expenses, budgeting, and understanding services and products available through financial institutions. These modules have been rigorously tested on the ground in Bihar and Uttar Pradesh, and are unlike other modules which are either very long or use a classroom format; they rely on 4-5 weekly interactive sessions between the trainers and the clients, and encourage clients to follow easy steps to take control over expenses and increase savings.

Process Evaluation

In addition to the data collection during Baseline, intervention and Endline, this study is one of the first at CMF to conduct a process evaluation of the critical processes underway during the course of this study. CMF will conduct surveys to better understand:

  • The CSP experience with EKO – nearly 40 CSPs were interviewed to better understand the processes CSPs were involved with when enrolling clients, servicing clients, and working with EKO.
  • Clients knowledge – assessing the clients’ knowledge after receiving the FE sessions.
  • Client experience – evaluating the clients’ experiences with the FE trainers.
  • Trainer experience – evaluating the trainers’ experiences after conducting the FE sessions.

Study Status/Future Sub-interventions

CMF has completed the baseline survey, and is currently finalizing the FE module. The logistical planning to conduct the intervention is currently underway as well.

The intervention will tentatively begin tentatively in November, 2012.