Technology Adoption in Microfinance: A Field Experiment in Indonesia

With the rise of technological development, more Microfinance Institutions (MFIs) have begun to leverage the benefits that technology offers to transform their process digitally. Other than streamlining organizational operation, there is opportunity for digital technology such as the introduction of a mobile app to have downstream effects on the borrowers’ digital adoption and financial behaviors. J-PAL affiliated researchers have been partnering with a microfinance cooperative who serves female clients, to collaborate on piloting activities to study the impact of a newly launched mobile app on the financial behaviors of their existing clients, who mostly have not been connected to the DFS ecosystem. There are potentials that a new app may further empower clients compared to the other typical digital wallet in the market, as it is designed in accordance with the cooperative’s operations and clients financial needs. Other than testing the logistical feasibility of future randomized evaluation designs, the piloting activities aim to investigate the different barriers clients may face in adopting such technology.