> Posted by Hannah Sherman, Project Associate, CFI

To create sustainable impact in the financial inclusion landscapes of emerging markets, providers must engage, train, and/or learn from vast networks of customers. Prospective customers must develop the skills to effectively use financial products. Doing this well is both difficult and expensive. Arifu, based in Kenya, attempts to minimize this challenge by bringing together providers and consumers in a cheap, efficient way. Arifu is a new kind of platform that provides customer capability-building through mobile technology. Arifu tests, refines, and hosts content developed by various educational organizations via SMS on mobile phones. Arifu’s business model is designed with scalability in mind, and it claims that it can be 90 percent cheaper than conventional customer outreach programs.

Arifu’s digital learning experts work with providers to design and develop behaviorally-informed training, advertising, and data collection programs. Department-level financial accounts, budget controls, custom alerts, and cost-benefit analytics help organizations minimize, measure, and justify their programs down to each interaction.

The financial education content covers the essentials: saving and borrowing, information about providers’ products and services, and financial services available through mobile phones. Arifu makes learning easier with nudges and reminders. The platform allows customers to share their financial goals with Arifu and receive content specifically about those goals, along with timely reminders to ensure goals can be met. Arifu reports that an International Labour Organization study based on just two months of use showed a 5 percent increase in knowledge retention following daily reminders, as compared to a 7 percent decrease without.

“Nudges, Reminders, and Default Options” was one of the seven behaviorally-informed practices for application in financial capability-building that we identified in our assessment of over 100 innovations as part of our recently-completed project, A Change in Behavior: Innovations in Financial Capability. Forgetfulness is a universal human phenomenon, and is even more likely when temptation lurks. We intend to save and pay bills on time. But things get in the way, and we don’t. Behavioral economists suggest that timely reminders, whether by SMS or in person, can enable customers to stick to their goals more often. Nudges and reminders, when well crafted, are among the easiest and least costly of these practices for financial service providers to incorporate into their operations.

Arifu has found 56 percent higher completion rates of training and testing with digital learners, and 26 percent higher performance for digital learners than in-person learners. Arifu also offers its own standard content under open and royalty-based licenses from other providers for partners who don’t want to build custom programs. Automated, real-time analytics and reporting at the program, content, and user levels enables provider organizations to quantify the impact of their programs and extract insights that will fuel innovation and inform their business decisions. Users own their own data and can export it on demand from Arifu’s secure servers.

Arifu-Syngenta smallholder farmer training

One of Arifu’s recent projects involved creating financial education training for smallholder farmer clients of Syngenta, an agriculture company. According to the Mercy Corps AgriFin Accelerate program, smallholder farmers are the most underserved group in the world by financial services, with women and youth at a particular disadvantage.

A critical driver for the innovation needed to transform services for low income farmers are technology companies focused on solving the tough problems faced in agriculture, including access to markets, information, improved inputs and infrastructure. Arifu is just one of the companies providing direct services for farmers. Alternative data providers like Arifu can increasingly provide links to these less accessible types of farmers, such as basic cell phone records, utility payments and emerging interaction on digital learning platforms via radio, television and SMS.

For other examples of leading financial capability-building efforts that use nudges and reminders, and for the other six behaviorally-informed practices, check out “A Change in Behavior: Innovations in Financial Capability.”

Photos credit: Arifu 

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