Financial Literacy and Financial Behaviour: Experimental Evidence from Rural Rwanda

Aussi Sayinzoga, Erwin H. Bulte, Robert Lensink*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

14 Citations (Scopus)

Abstract

We organise a field experiment with smallholder farmers in Rwanda to measure the impact of financial literacy training on financial knowledge and behaviour. The training increased financial literacy of participants, changed their savings and borrowing behaviour and had a positive effect on the new business start-up. However, it failed to have a significant (short-term) impact on income. Using a two-stage regression framework, we identify enhanced financial literacy as one of the important factors explaining behavioural changes. We also test whether financial knowledge spillovers from trained farmers to their peers in local village banks but find no evidence for that.

Original languageEnglish
Pages (from-to)1571-1599
JournalEconomic Journal
Volume126
Issue number594
DOIs
Publication statusPublished - 2016

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