Australia and New Zealand - Financial Literacy for Remitters


  • PROJECT TITLE: Financial Literacy for Remitters
  • TARGET SEGMENT: Migrants from Tonga, Samoa, Sri Lanka, Hong Kong, Korea, China
  • DELIVERY CHANNEL: Group-based financial literacy seminar
  • EVALUATION TEAM: David McKenzie (World Bank), John Gibson (World Bank), Bilal Zia (World Bank)
  • PARTNERS: Ministry of Pacific Island Affairs, NZ; University of Waikato
  • TIMELINE: March 2011 - April 2012


Remittance costs are high in the Pacific, which reduces the development potential of these flows. The efficacy of policies geared toward reducing the cost of remitting and spurring competition by increasing disclosure of costs relies heavily on the abilities of migrants to understand how to use the different methods available for remitting and the costs incurred for each method. Remittance-specific financial literacy training is being used in Australia and New Zealand to determine whether this will serve to induce migrants to choose lower-cost methods.

While systematic evidence on the financial literacy of migrants is scarce, the data available suggest migrants often lack knowledge of the components of a remittance cost, available methods, or how to compare such methods. The main goal of the present research is, therefore, to estimate the causal impact of financial literacy training for migrants on their remitting behavior. In particular, the research will assess whether (a) financial literacy training leads migrants to adopt new, cheaper, products such as debit cards for sending remittances; (b) whether financial literacy training changes the amount and frequency of remitting, and therefore the amount received by migrants in the home country; and (c) how these effects differ by country of origin.

Additionally, many migrants do not use credit cards and rely on more expensive forms of credit such as pay-day loans and hire purchase agreements. A second component of the financial literacy training will be to provide information on the costs of these alternative forms of credit, and information on how to apply to get a credit card, with the goal of seeing whether this reduces the use of more expensive forms of credit.

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