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Just enough, just in time

Ideas42 supports the Dominican Republic's micro-entrepreneurs

An Ideas42 project in the Dominican Republic divided micro-entrepreneurs between two educational models.

They include a classroom-based course on accounting principles such as double-entry bookkeeping  or a shorter “rules-of-thumb” workshop, with tips such as, ‘Separate personal and business money into two drawers or apron pockets.’

At the end, those who had learned accounting principles had not made any measurable changes to their business practices, while the “rules-of-thumb” group were more likely to have added up monthly totals, were more accurate in their final figures, and reported shorter “slow” periods for sales — perhaps because keeping track allowed for faster perception of problems.

Simple instructions are easier to remember and apply to real life

Simple instructions are easier to remember and apply to real life, explains Katy Davis, vice-president of Ideas42. Full concepts and procedures are more “correct,” but also more difficult to implement on the fly.

Use this principle to help members learn and act. “Instead of having a separate education module, embed the necessary pieces of information in the product, so members can access it at the time they need to act,” says Davis. “If I am thinking about buying a home, then that is the moment when I would like more resources around my credit score.”

“Just-in-time-information,” explains Davis, “appears just in time to make a difference in someone’s life.” ◊

Read more

For more about financial literacy and Ideas42, read “Cracking the financial literacy code” (Enterprise, February/March, 2016).