Fingerprinting Malawian Paprika Farmers

I attended a morning session of a World Bank conference on Measurement, Promotion, and Impact of Access to Financial Services. Some highlights:

• Opening remarks by Princess Maxima of the Netherlands, which I missed.
• An experiment presented by Xavier Giné in which some farmers wanting to take loans from a state bank were fingerprinted so that if they defaulted, they would not be able to fool the bank by reborrowing under a different name. As a result, more farmers repaid their loans. The hope is that this will give the lender the confidence to extend loans to more people, but that hasn't happened yet. Discussant Alan de Brauw pointed out that the costs of the technology probably exceed the benefits for the bank. Still, the experiment demonstrates the larger point that access to future loans is a powerful incentive to repay current ones.
• An experiment in Indonesia presented by Bilal Zia and seeming to show that that if you want people to open savings accounts, it's cheaper to pay them to do it---actually offer them the equivalent of a few dollars---than to put them through a two-hour financial literacy course. That's interesting because a lot of aid money is being spent on financial literacy now. But Jonathan Morduch and Monique Cohen and others asked some good questions. Such as: How many of the people who opened a savings account for the incentive money never used it after that? Usage of the account is the goal, not just opening it.
• Jonathan also previewed his forthcoming (coauthored) book, Portfolios of the Poor, which looks fantastic.