Bank on It: How Bank Account Access Enhances the Effectiveness of Financial Literacy Programs in Pakistan: A Quasi-Experimental Evaluation

Abstract

While the experiential learning approach effectively improves financial literacy in developed countries, its applicability in developing countries faces resource constraints. However, expanding banking access in developing countries may enhance traditional financial education programs by enabling the practical application of learned financial concepts. Using a quasi-experimental design, we examine this hypothesis by evaluating the impact of Pakistan's flagship financial education program on the financial knowledge of primary school students and demonstrate that the program significantly improves students' financial knowledge. Crucially, prior banking experience is statistically significant, implying that students having banking access are more receptive to financial literacy programs. From a policy point of view, this indicates that providing bank account access to students, alongside financial education, enhances the effectiveness of financial literacy programs in developing countries like Pakistan. It also advocates that financial literacy initiatives achieve better value for money when targeting population segments with existing financial service access.