Godfrey Madigu, a Kenyan PhD student at the Navarra Center for International Development (NCID) of the University of Navarra, participated in six-week project on financial education for rural people in Mozambique, which was implemented by the Universidade Nova de Lisboa (Portugal). The NCID is one of eight projects of the Institute for Culture and Society (ICS), the Humanities and Social Sciences research center of the University of Navarra.

"The project aims to examine the relevance of financial education for micro entrepreneurs," Godfrey Madigu explained. The project collected microeconomic data through a procedure called Randomized Controlled Trial, a type of impact assessment that uses randomization to implement a program or apply policies.

"This experience," as Madigu specified, "has helped me to better understand the exact kind of problem we face. I was also able to see how data are collected on a micro level and the difficulties that arise from it." As he explained, the greatest challenge when interviewing people is asking the right questions and knowing how to collect the answers.

While the aforementioned Portuguese academic center implemented this yearlong project, it was funded by the Government of Mozambique, the telephone company Cateira Móvel Mozambique and the International Growth Center.

More than 500 cellular phone users

According to a working paper by NCID collaborator Pedro Vicente, access to financial services in sub-Saharan Africa is very limited: fewer than one in five households have a bank account, thus making any kind of savings more difficult. The project in which Madigu was involved seeks to educate people on financial concepts: "We taught them a number of financial concepts, such as direct costs, profits and losses in their businesses."

In addition, we showed participants different forms of saving, including savings groups among a small group of people (Rotating Savings and Credit Association- ROSCA), with banks themselves or the M-Kesh system, a bank telephone service that permits bank account management from a telephone terminal and thus has great potential for encouraging savings. In Africa, it is important to note, there are more than 500 million cellular phone users.