Financial Diaries in an innovative methodology, a tool to obtain multi-dimensional qualitative and quantitative data on the lives of low-income households. Based on Stuart Rutherford's methodology and already developed in South Africa and Kenya from 2012, the study has been conducted in 2013-2015 in Mexico, called Diarios Financieros de México.
Sponsored by BANSEFI – the Mexican WSBI member – the 13-month study gives an insight into a sample of low-income households. Interviewed about every two weeks, they detail how they administrate their money, financial transactions, what are their main obstacles. A more qualitative aspect covers the rationales or motivations behind financial decisions to save, borrow, invest… In Mexico, the sample covered 185 households from Mexico City, a town in Puebla and a rural community in Oaxaca, with an average monthly income of USD66.
As a development bank, BANSEFI has been sponsoring such survey as part of its missions to promote financial inclusion in the country and migrate people into a bank account.
The main conclusions of Diarios financieros are the following:
Non-financial services have soothe households' financial burden
Bad quality services such as non-reliable supply of water or insecurity of public transports turn into additional costs for the families who took part to the study. For instance, as public transportation in the city of Mexico isn't safe nor reliable, families – and women especially – have to take a taxi. When there is no water in a community for days, money goes into buying bottled water. These expenses reduce families' available income. Improving public services could have a huge impact on households' finances.
Interviewed households appreciate being able to build their financial capacity when information is concise, practical and straightforward
Families would like to be trained to be able to withdraw money at ATM, instead of abstract guides.
Within the sample, two thirds of the surveyed households are benefiting from Prospera, a government social programme sponsoring families of low income whose children are in age of going to school, under the conditions that children do not miss school that the family regularly goes to health centres and also providing nutrition support. The study shows the importance of the programme Prospera to support the community as the promise of a stable income.
For such households, Prospera averagely represents 12% of their income (up to 44% in Oaxaca). Such amount is directly wired on households' account, which in the city of Mexico, they can withdraw at ATMs and thus consider as deposits and withdrawals from the BANSEFI account. In Puebla and Oaxaca, families receive the money cash and thus do not consider such money as deposit. Indeed, in such areas, households didn't know they could execute other financial transactions. Yet, although they are not traditional savings tools, the spread of credits to clients or asking a loan from friends or family are important behaviours to maintain social and financial relationships.