News story 13th Jul 2015

Online game to improve financial decisions

With the assistance of a grant through the Institute of Money, Technology and Financial Inclusion (IMTFI) at University of California, researchers from Monash Business School are developing an innovative online game to improve basic financial literacy in Cambodia.

roscas-grant

The research team of Professor Pushkar Maitra, Department of Economics, Associate Professor Paul Lajbcygier and Andrew Crawford, Department of Banking and Finance, are currently working on the development of a tablet app and a card game. The app and card game aim to help Cambodian garment workers better understand how Rotating Savings and Credit Associations (Roscas) work.

Roscas are groups of individuals who agree to save and borrow together. Recipients of the funds are commonly chosen based on financial need or through a lottery.

Cambodian garment factory workers commonly use bidding Roscas, where the pool of funds is given to the participant with the highest interest rate bid.

Financial education the aim

Associate Professor Lajbcygier said despite the rise in microfinance adoption across the developing world, there remains a wide variety of informal financing available, including Roscas.

"Roscas can be described as the poor man's bank, and bring with them a high level of risk," Associate Professor Lajbcygier said.

"In Cambodia, as in most developing countries, the growth of microfinance has brought into focus the importance of financial literacy among poor households.

"Better education would give participants in Roscas greater understanding of how they can be effectively used.

"Undoubtedly, games and apps are a growing tool for providing financial education. Evidence has shown that interactive games can help change peoples' knowledge of financial management, calculation and resource allocation.

"The expansion of such games into the developing world seems like a logical next step."

Game designed for a tablet

The game, initially aimed at Cambodian garment workers, will be developed as a tablet app and card game.

Players take on the role of a garment factory worker and decide whether to borrow from the Roscas each month or to continue saving. They will also have to decide how to spend their money on outstanding needs with consideration of their other limited assets.

The game will be released in the first instance to garment factory workers in Phnom Phenh to allow the research team to gather data and explore the dynamics of the players' financial decision making.

Associate Professor Lajbcygier said understanding these dynamics could lead to innovation in mircofinance product design that can provide the benefits of Roscas without high levels of risk.

Additionally, wider release of the game online may provide an educational benefit to those wanting to learn the concept of Roscas. It will also allow the researchers to gather behavioural data to understand how financial group decision-making may differ cross-culturally.

Undoubtedly, games and apps are a growing tool for providing financial education. Evidence has shown that interactive games can help change peoples' knowledge of financial management, calculation and resource allocation.

Associate Professor Lajbcygier

Department of Banking and Finance

Other projects

This project continues the teams' research into the best delivery methods to improve financial literacy in Cambodia.

The team had previously developed an episode of a popular comedy show series, watched by around 20 per cent of Cambodians across the entire country. The storylines involved mobile money, savings concepts and budgeting/cash management.

Preliminary surveys of 200 garment factory workers in Phnom Phen are now complete, and the TV episode will soon go to air. When aired, a Cambodian-wide survey is planned to evaluate whether such embedded financial education can deliver cheap and effective rudimentary financial education to Cambodians across the entire country.