BBVA’s financial education grants will finance five projects seeking to resolve challenges from the pandemic

In this fourth edition of the program, each selected team will have access to a €10,000 prize to finance their research project. The global pandemic has demonstrated the importance of financial education as a tool to overcome the challenges that contribute to a more sustainable society. It is no surprise, therefore, that the winning proposals mostly focus on solving the sector’s most pressing challenges.

Since 2018, BBVA’s Center for Financial Education and Capability has given €200,000 to 22 projects from countries such as Mexico, the U.S., Spain, Argentina, Colombia, Peru, Turkey, Kenya and Indonesia. These are the winning projects from 2021.

1- IE Foundation (Spain) 

The research led by Laura Núñez Letamendia will delve into the role of financial education in households’ financial well-being. The work is based on analysis of the population’s knowledge of concepts like inflation, diversification and simple and compound interest;  understanding of investment vehicles; planning skills and the sense of financial empowerment; in other words, the confidence each person has in their abilities to carry out financial management activities.

The research will explore the influence of these four pillars on people’s well-being or vulnerability through the Consumer Financial Protection Bureau’s (CFPB)  scale of well-being. For this, it will use the survey conducted by the Household Savings Observatory in March 2021 of 1,500 Spanish households as an empirical base. This poll collected information on variables related to individuals’ financial behaviors and attitudes prior to the pandemic, and their level of financial education. “Beyond the satisfaction of the funding, it is an honor for us to have been selected by such a prestigious program as BBVA Edufin,” said Laura Núñez when learning that her project had been selected.

2- William Marsh Rice University - Baker Institute (EE. UU. - México) 

Many Mexicans lost their jobs due to the economic crisis from the pandemic. They found themselves pushed into the informal economy, or were forced to spend their retirement savings. Researcher José Iván Rodríguez-Sánchez began the project "Improving financial education and retirement accounts in Mexico after the COVID-19 pandemic” in order to explore the pandemic’s impact on Mexicans and how it has influenced their interactions with the financial system. This expert was enthusiastic when hearing that his project had been selected: “The fact that BBVA has chosen me, makes me feel very honored and with a lot of responsibility to do my research.” 

The conclusions of this study will seek to understand the vision that many of the country’s citizens have of the future now that their ability to save, plan for retirement and access credit has been diminished. The research will analyze the impact that better financial education would have in the current situation and will provide recommendations of public policies to offer quality education and greater financial inclusion.

3- The Pennsylvania State University (EE. UU. - Colombia) 

Despite its development in recent years, Colombia is facing a dramatic increase in economic equality, which has gotten worse in rural areas. In this scenario, the fintech industry is emerging as an option to provide alternative financial products and services that are adapted to users’ needs. Led by Priya Sharma, this project explores the role of financial inclusion and the sector’s technologies as a tool to boost economic growth from the perspective of several representatives of two sectors: fintech companies and rural communities, specifically a group of women coffee growers and families running small cocoa farms. "By using a learning sciences approach, we are committed to finding alternatives to close the inequality gap and improve the quality of life of those who need it the most,", said this expert.

The information from both groups will be collected in in-depth interviews and two workshops, which will be held separately with a total of  40 participants. The one for fintech companies, which will take place in Bogota, will focus on the products and services the rural population consider a priority and how they perceive the needs and expectations of these communities. For the farmers, the research aims to understand their perspectives of poverty, inequality and financial inclusion in order to understand their needs and offer solutions. The final report will offer recommendations regarding how to challenge the country’s current paradigm of financial education and the role of financial technologies in a challenging context, among other topics.

4- Universidad de Salamanca (Spain) 

Javier Sierra Pierna is leading this research that focuses on the design and implementation of an experiment in different schools in Castile and Leon. Its goal is to measure the effectiveness of a simulation based on active learning as a strategy to teach financial education.

This initiative will study the effects that practical experience and applying theories to real cases could have on students’ learning for topics related to financial education. The results of the research project will serve to learn more about young people’s educational weaknesses in this subject, possible problems related to their learning, and the potential of simulations as an instrument to reinforce teaching in this field.

5- Universidad Torcuato Di Tella (Argentina) 

Guadalupe Dorna is leading this project, together with the Junior Achievement Argentina Foundation (JA), which approaches financial education as an essential tool for secondary students and teachers in the country. "The transfer of financial knowledge and skills is a key aspect for young people to be able to fully develop in the future,", said Dorna. The objectives of this research, which will gather data from 1,400 surveys, will focus on: learning about Argentine young people’s perceptions of their financial education needs, measuring their knowledge in this subject, getting to know their financial habits and identifying the tools and services they use most.

The conclusions will serve to measure young people’s level of financial knowledge and to make audiovisual content that raises their awareness regarding the need for this type of training. The study will serve JA as the foundation to improve and expand what they currently offer in terms of financial education. "This grant will help us better understand their educational needs and enhance our financial litteracy programs," said Noël Zemborain, Junior Achievement Argentina Director.

Urgent challenges

One of the topics that several participants from countries like Argentina, Colombia, Spain and Mexico stressed the most is that of the lack of financial education among young people. The 2021 EduFin Position Paper, the document that represents the center’s position on the global state of financial education, coincides with the need to improve the financial education of this group. For this reason, among other measures, it proposes personalized financial education that is adapted to the needs of each individual in all stages of life through a variety of accessible channels.

Another challenge that has caught the attention of researchers is the digital gap, which has been exacerbated by the acceleration of digitization from the pandemic. “It is important to improve the level of digital financial education to enhance access to digital products and services,” the center’s report indicates.

Several of the proposals presented put the focus on financial inclusion. The position paper expands this concept beyond access as “it also includes the capacity to use and enjoy quality financial services that allow individuals and families to meet their financial obligations, build resilience to financial shocks, make decisions that allow them to enjoy life and take advantage of any opportunities that may arise.”

One of the topics that the center feels should be further developed in the research field is the role of financial education in mobilizing capital for sustainable growth. To this end, the report recommends strengthening investors’ financial education in order to understand the different strategies and sustainable products that “can promote the behavioral change required by sustainability.”