Shawn A. Cole

Associate Professor of Business Administration

Shawn Cole is an associate professor in the Finance Unit at Harvard Business School, where he teaches a second-year elective course “Business at the Base of the Pyramid.”

His research examines corporate and household finance in emerging markets, with a focus on banking, microfinance, insurance, and the relationship between financial development and economic growth. He has worked in China, India, Indonesia, South Africa, and Vietnam. He is an affiliate of the National Bureau of Economic Research, MIT’s Jameel Poverty Action Lab, and the Bureau for Research and Economic Analysis of Development.

He has taught FIN1 and FIN2 in the core curriculum, as well various executive education courses, and currently teaches a portion of the PhD-level development class in the department of Economics.

Before joining the Harvard Business School, Professor Cole worked at the Federal Reserve Bank of New York in the economic research department. He currently serves on the Boston Federal Reserve's Community Development Research Advisory Council, and has served as an external advisor to the Gates Foundation, and as the chair of the endowment management committee of the Telluride Association, a non-profit educational organization.

He received a Ph.D. in economics from the Massachusetts Institute of Technology in 2005, where he was an NSF and Javits Fellow, and an A.B. in Economics and German Literature from Cornell University.

 

Journal Articles

  1. Dynamics of Demand for Index Insurance: Evidence from a Long-Run Field Experiment

    Citation:

    Cole, Shawn A., Daniel Stein, and Jeremy Tobacman. "Dynamics of Demand for Index Insurance: Evidence from a Long-Run Field Experiment." American Economic Review: Papers and Proceedings (forthcoming).
  2. Smart Money? The Effect of Education on Financial Outcomes

    Household financial decisions are important for household welfare, economic growth and financial stability. Yet, our understanding of the determinants of financial decision-making is limited. Exploiting exogenous variation in state compulsory schooling laws in both standard and two-sample instrumental variable strategies, we show education increases financial market participation, measured by investment income and equities ownership, while dramatically reducing the probability that an individual declares bankruptcy, experiences a foreclosure, or is delinquent on a loan. Further results and a simple calibration suggest the result is driven by changes in savings or investment behavior, rather than simply increased labor earnings.

    Citation:

    Cole, Shawn A., Anna Paulson, and Gauri Kartini Shastry. "Smart Money? The Effect of Education on Financial Outcomes." Review of Financial Studies (forthcoming).
  3. Incentivizing Calculated Risk-Taking: Evidence from an Experiment with Commercial Bank Loan Officers

    This paper uses a series of experiments with commercial bank loan officers to test the effect of performance incentives on risk assessment and lending decisions. We first show that while high-powered incentives lead to greater screening effort and more profitable lending, their power is muted by both deferred compensation and the limited liability typically enjoyed by credit officers. Second, we present direct evidence that incentive contracts distort judgment and beliefs, even among trained professionals with many years of experience. Loans evaluated under more permissive incentive schemes are rated significantly less risky than the same loans evaluated under pay-for-performance.

    Keywords: banking; management processes; risk management; credit products; experimental economics;

  4. Liability Structure in Small-Scale Finance

    Microfinance, the provision of small individual and business loans, has experienced dramatic growth, reaching over 150 million borrowers worldwide. Much of the success of microfinance has been attributed to attempts to overcome the challenges of information asymmetries in uncollateralized lending. However, very little is known about the optimal contract structure of these loans, and there is substantial variation across lenders, even within a particular setting. This paper exploits a plausibly exogenous change in the liability structure offered by a microfinance program in India, which shifted from individual to group liability lending. We find evidence that the lending model matters: for the same borrower, the required monthly loan installments are 11 percent less likely to be missed under the group liability setting in comparison with individual liability. In addition, compulsory savings deposits are 20 percent less likely to be missed under group liability contracts.

    Keywords: Microfinance; Emerging Markets; Financial Markets; Legal Liability; Banks and Banking; Banking Industry; India;

    Citation:

    Carpena, Fenella, Shawn Cole, Jeremy Shapiro, and Bilal Zia. "Liability Structure in Small-Scale Finance." World Bank Economic Review 27, no. 3 (September 2013): 437–469.
  5. Barriers to Household Risk Management: Evidence from India

    Why do many households remain exposed to large exogenous sources of non-systematic income risk? We use a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of an innovative rainfall insurance product. Demand is significantly price sensitive, but widespread take-up would not be achieved even if the product offered a payout ratio comparable to U.S. insurance contracts. We present evidence suggesting that lack of trust, liquidity constraints, and limited salience are significant non-price frictions that constrain demand. We suggest contract design improvements to mitigate these frictions.

    Keywords: Risk Management; Household Characteristics; India;

    Citation:

    Cole, Shawn A., Xavier Gine, Jeremy Tobacman, Petia Topalova, Robert M. Townsend, and James Vickery. "Barriers to Household Risk Management: Evidence from India." American Economic Journal: Applied Economics 5, no. 1 (January 2013): 104–135.
  6. Do Voters Demand Responsive Governments? Evidence from Indian Disaster Relief

    Using rainfall, public relief, and election data from India, we examine how governments respond to adverse shocks and how voters react to these responses. The data show that voters punish the incumbent party for weather events beyond its control. However, fewer voters punish the ruling party when its government responds vigorously to the crisis, indicating that voters reward the government for responding to disasters. We also find evidence suggesting that voters only respond to rainfall and government relief efforts during the year immediately preceding the election. In accordance with these electoral incentives, governments appear to be more generous with disaster relief in election years. These results describe how failures in electoral accountability can lead to suboptimal policy outcomes.

    Keywords: Political Elections; System Shocks; Natural Disasters; Policy; Motivation and Incentives; Public Opinion; India;

    Citation:

    Cole, Shawn, Andrew Healy, and Eric Werker. "Do Voters Demand Responsive Governments? Evidence from Indian Disaster Relief." Journal of Development Economics, no. 97 (2012): 167–181.
  7. Prices or Knowledge? What Drives Demand for Financial Services in Emerging Markets?

    Financial development is critical for growth, but its micro-determinants are not well understood. We test leading theories of low demand for financial services in emerging markets, combining novel survey evidence from Indonesia and India with a field experiment. We find a strong correlation between financial literacy and behavior. However, a financial education program has modest effects, increasing demand for bank accounts only for those with low levels of education or financial literacy. In contrast, small subsidies greatly increase demand. A follow-up survey confirms these findings, demonstrating that the newly opened accounts remain open and in use two years after the intervention.

    Keywords: Price; Knowledge; Demand and Consumers; Emerging Markets; Banks and Banking; Education; Finance; Behavior; Service Operations; Financial Services Industry; India; Indonesia;

    Citation:

    Cole, Shawn A., Thomas Sampson, and Bilal Zia. "Prices or Knowledge? What Drives Demand for Financial Services in Emerging Markets?" Journal of Finance 66, no. 6 (December 2011): 1933–1967.
  8. Marketing Complex Financial Products in Emerging Markets: Evidence from Rainfall Insurance in India

    Recent financial liberalization in emerging economies has led to the rapid introduction of new financial products. Lack of experience with financial products, low levels of education, and low financial literacy may slow adoption of these products. This article reports on a field experiment that offered an innovative new financial product, rainfall insurance, to 600 small-scale farmers in India. A customized financial literacy and insurance education module communicating the need for personal financial management and the usefulness of formal hedging of agricultural production risks was offered to randomly selected farmers in Gujarat, India. The authors evaluate the effect of the financial literacy training and three marketing treatments using a randomized controlled trial. Financial education has a positive and significant effect on rainfall insurance adoption, increasing take-up from 8% to 16%. Only one marketing intervention, the money-back guarantee, has a consistent and large effect on farmers' purchase decisions. This guarantee, comparable to a price reduction of approximately 40%, increases demand by seven percentage points.

    Keywords: Literacy Characteristics; Insurance; Marketing; Decisions; Demand and Consumers; Financial Instruments; Emerging Markets; Personal Finance; Education; Agribusiness; Developing Countries and Economies; Innovation and Invention; Gujarat;

    Citation:

    Gaurav, Sarthak, Shawn A. Cole, and Jeremy Tobacman. "Marketing Complex Financial Products in Emerging Markets: Evidence from Rainfall Insurance in India." Supplement. JMR, Journal of Marketing Research 48 (October 2011): S150–S162.
  9. Financial Development, Bank Ownership, and Growth. Or, Does Quantity Imply Quality?

    Keywords: Finance; Growth and Development; Banks and Banking; Ownership; Quality;

    Citation:

    Cole, Shawn A. "Financial Development, Bank Ownership, and Growth. Or, Does Quantity Imply Quality?" Review of Economics and Statistics 91, no. 1 (February 2009): 33–51.
  10. Fixing Market Failures or Fixing Elections? Elections, Banks and Agricultural Lending in India

    Keywords: Failure; Voting; Banks and Banking; Agribusiness; India;

    Citation:

    Cole, Shawn A. "Fixing Market Failures or Fixing Elections? Elections, Banks and Agricultural Lending in India." American Economic Journal: Applied Economics 1, no. 1 (2009): 219–50.
  11. Remedying Education: Evidence from Two Randomized Experiments in India

    This paper presents the results of two randomized experiments conducted in schools in urban India. A remedial education program hired young women to teach students lagging behind in basic literacy and numeracy skills. It increased average test scores of all children in treatment schools by 0.28 standard deviation, mostly due to large gains experienced by children at the bottom of the test-score distribution. A computer-assisted learning program focusing on math increased math scores by 0.47 standard deviation. One year after the programs were over initial gains remained significant for targeted children, but they faded to about 0.10 standard deviation.

    Keywords: Literacy Characteristics; Teaching; Performance Improvement; Competency and Skills; India;

    Citation:

    Banerjee, A., Shawn A. Cole, E. Duflo, and L. Linden. "Remedying Education: Evidence from Two Randomized Experiments in India." Quarterly Journal of Economics 122, no. 3 (August 2007): 1235–1264.
  12. Capitalism and Freedom: Slavery and Manumission in Louisiana, 1725-1820

    Keywords: Economic Systems; Society; Louisiana;

    Citation:

    Cole, Shawn A. "Capitalism and Freedom: Slavery and Manumission in Louisiana, 1725-1820." Journal of Economic History 65, no. 4 (December 2005).

Book Chapters

  1. Comparative Regulation of Market Intermediaries: Insights from the Indian Life Insurance Market

    Citation:

    Anagol, Santosh, Shawn A. Cole, and Shayak Sarkar. "Comparative Regulation of Market Intermediaries: Insights from the Indian Life Insurance Market." Chap. 12 in Modernizing Insurance Regulation, edited by John H. Biggs and Matthew P. Richardson. Hoboken, NJ: John Wiley & Sons, 2014.
  2. Valuing Financial Literacy

    Keywords: Valuation; Finance; Knowledge Use and Leverage;

    Citation:

    Cole, Shawn, Thomas Sampson, and Bilal Zia. "Valuing Financial Literacy." Chap. 12 in Banking the World: Empirical Foundations of Financial Inclusion, edited by Robert Cull, Asli Demirguc-Kunt, and Jonathan Morduch. Cambridge, MA: MIT Press, 2012.
  3. Evidence from the Firm: A New Approach to Understanding Corruption

    Due to its clandestine nature, most of what we understand about corruption comes from survey evidence and self-reported perceptions of corruption: this limits both the range of questions that can be asked and the precision of answers that can be provided. This chapter proposes a new lens to understand corruption, using internal records collected from firms that pay bribes. We examine widespread corruption in three industries in an Asian developing country: procurement, pharmaceutical sales, and construction. Using data of real bribes, we provide new estimates of corruption and study its relationship with organizational ownership.

    Keywords: Measurement and Metrics; Crime and Corruption; Organizations; Ownership; Asia;

    Citation:

    Cole, Shawn A., and Anh Tran. "Evidence from the Firm: A New Approach to Understanding Corruption." Chap. 14 in International Handbook on the Economics of Corruption, Volume 2, edited by Susan Rose-Ackerman and Tina Soreide, 408–427. Edward Elgar Publishing, 2012.
  4. Where Does It Go? Spending by the Financially Constrained

    Citation:

    Cole, Shawn A., Peter Tufano, and John Thompson. "Where Does It Go? Spending by the Financially Constrained." Chap. 2 in Borrowing to Live: Consumer and Mortgage Credit Revisited, edited by Nicolas P. Retsinas and Eric S. Belsky, 65–91. Brookings Institution Press, 2008.
  5. Bank Financing in India

    Keywords: Banks and Banking; Financing and Loans; Banking Industry; India;

    Citation:

    Cole, Shawn A., A. Banerjee, and E. Duflo. "Bank Financing in India." In India's and China's Recent Experience with Reform and Growth, edited by Wanda Tseng and David Cowen. Palgrave Macmillan, 2005.
  6. Banking Reform in India

    Keywords: Banks and Banking; Governing Rules, Regulations, and Reforms; Government and Politics; Business and Government Relations; Developing Countries and Economies; Banking Industry; India;

    Citation:

    Cole, Shawn A., A. Banerjee, and E. Duflo. "Banking Reform in India." In India Policy Forum. Vol. 1, edited by Arvind Panagariya, Barry Bosworth, and Suman Bery, 277–323. Brookings Institution Press, 2004.

Working Papers

  1. How Does Risk Management Influence Production Decisions? Evidence from a Field Experiment

    Weather is a key source of income risk for many firms and households, particularly in emerging market economies. This paper studies how an innovative risk management instrument for hedging rainfall risk affects production decisions among a sample of Indian agricultural firms, using a randomized controlled trial approach. We find that the provision of insurance induces farmers to shift production towards higher-return but higher-risk cash crops, particularly amongst more-educated farmers. Our results support the view that financial innovation may help mitigate the real effects of uninsured production risk. In a second experiment we elicit willingness to pay for insurance policies that differ in their contract terms, using the Becker-DeGroot-Marshak mechanism. Willingness-to-pay is increasing in the actuarial value of the insurance, but substantially less than one-for-one, suggesting that farmers' valuations are inconsistent with a fully rational benchmark.

    Keywords: Risk Management; Production; Weather and Climate Change; Insurance; Emerging Markets; Agribusiness; Insurance Industry; Agriculture and Agribusiness Industry; India;

    Citation:

    Cole, Shawn, Xavier Gine, and James Vickery. "How Does Risk Management Influence Production Decisions? Evidence from a Field Experiment." Harvard Business School Working Paper, No. 13-080, March 2013.
  2. High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses

    Financial literacy and cognitive capabilities are convincingly linked to the quality of financial decision-making. Yet, there is little evidence that education intended to improve financial decision-making is successful. Using plausibly exogenous variation in exposure to state-mandated personal finance and mathematics high school courses, affecting millions of students, this paper answers the question "Can good financial behavior be taught in high school?" It can, though not via traditional personal finance courses, which we find have no effect on financial outcomes. Instead, we find additional mathematics training leads to greater financial market participation, investment income, and better credit management, including fewer foreclosures.

    Keywords: Secondary Education; Personal Finance; Outcome or Result;

    Citation:

    Cole, Shawn, Anna Paulson, and Gauri Kartini Shastry. "High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses." Harvard Business School Working Paper, No. 13-064, January 2013. (Revised April 2014.)
  3. The Value of Advice: Evidence from Mobile Phone-Based Agricultural Extension

    Attempts to explain the astonishing differences in agricultural productivity around the world typically focus on farm size, farmer risk aversion, and credit constraints, with an emphasis on how they might serve to limit technology adoption. This paper takes a different tack: can managerial practices explain this variation in productivity? A randomized evaluation of the introduction of a mobile-phone based agricultural consulting service, "Avaaj Otalo (AO)" to cotton farmers in Gujarat, India, reveals the following: demand for agricultural advice is high, with more than half of farmers calling AO in the first seven months. Farmers offered the service turn less often to other farmers and input sellers for agricultural advice. Management practices change as well: we observe an increase in the adoption of more effective pesticides and reduced expenditure on less effective and hazardous pesticides. Treated farmers also sow a significantly larger quantity of cumin, a lucrative but risky crop. Interestingly, use of the service is increasing in the level of farmer education, but education levels do not affect the size of treatment effects. Farmers appear willing to follow advice without understanding why the advice is correct: the average respondent does not demonstrate improved agricultural knowledge, though there is some evidence educated farmers learn from the service.

    Keywords: Management Practices and Processes; Performance Productivity; Agribusiness; Mobile Technology; Agriculture and Agribusiness Industry; Gujarat;

    Citation:

    Cole, Shawn A., and A. Nilesh Fernando. "The Value of Advice: Evidence from Mobile Phone-Based Agricultural Extension." Harvard Business School Working Paper, No. 13-047, November 2012.
  4. Understanding the Advice of Commissions-Motivated Agents: Evidence from the Indian Life Insurance Market

    We conduct a series of field experiments to evaluate two competing views of the role of financial service intermediaries in providing product recommendations to potentially uninformed consumers. One view argues intermediaries provide valuable product education, and guide consumers towards suitable products. Consumers understand how commissions affect agents' incentives, and make optimal product choices. The second view argues that intermediaries recommend and sell products that maximize the agents' well-being, with little or no regard for the customer. Audit studies in the Indian life insurance market find evidence supporting the second view: in 60-80% of visits, agents recommend unsuitable (strictly dominated) products that provide high commissions to the agents. Customers who specifically express interest in a suitable product are more likely to receive an appropriate recommendation, though most still receive bad advice. Agents cater to the beliefs of uninformed consumers, even when those beliefs are wrong.

    We then test how regulation and market structure affect advice. A natural experiment that required agents to describe commissions for a specific product caused agents to shift recommendations to an alternative product, which had even higher commissions but no disclosure requirement. We do find some scope for market discipline to generate debiasing: when auditors express inconsistent beliefs about the product suitable from them, and mention they have received advice from another seller of insurance, they are more likely to receive suitable advice. Agents provide better advice to more sophisticated consumers.

    Finally, we describe a model in which dominated products survive in equilibrium, even with competition.

    Keywords: Customers; Insurance; Product; Service Operations; Agency Theory; Sales; Motivation and Incentives; Competition; Value; Insurance Industry; India;

    Citation:

    Anagol, Santosh, Shawn Cole, and Shayak Sarkar. "Understanding the Advice of Commissions-Motivated Agents: Evidence from the Indian Life Insurance Market." Harvard Business School Working Paper, No. 12-055, January 2012. (Revised March 2013.)

Cases and Teaching Materials

  1. Introduction to Financial Services for the Global Poor

    Citation:

    Cole, Shawn. "Introduction to Financial Services for the Global Poor." Harvard Business School Background Note 214-024, August 2013.
  2. Financial Services for the World's Poor

    Citation:

    Cole, Shawn. "Financial Services for the World's Poor." Harvard Business School Module Note 213-107, March 2013.
  3. SKS and the AP Microfinance Crisis (TN)

    Citation:

    Cole, Shawn. "SKS and the AP Microfinance Crisis (TN)." Harvard Business School Teaching Note 213-092, March 2013.
  4. China Life: Micro Insurance for the Poor (TN)

    Citation:

    Cole, Shawn. "China Life: Micro Insurance for the Poor (TN)." Harvard Business School Teaching Note 213-091, March 2013.
  5. Social Finance, Inc. (TN)

    Keywords: Investing; nonprofit;

    Citation:

    Cole, Shawn. "Social Finance, Inc. (TN)." Harvard Business School Teaching Note 213-090, March 2013. (Revised March 2013.)
  6. BANEX and the No Pago Movement (TN) (A) and (B)

    Citation:

    Cole, Shawn. "BANEX and the No Pago Movement (TN) (A) and (B) ." Harvard Business School Teaching Note 213-101, February 2013.
  7. BASIX (Abridged)

    BASIX, an Indian microfinance corporation, must decide whether to continue to sell weather insurance to its clients. A brand-new financial product, weather insurance pays if measured rainfall during the growing season falls below a pre-specified limit. Mr. Sattaiah, managing director of the BASIX's bank, considers a revised insurance policy for the coming season, weighing the costs and potential risks of expanding the product against the potential benefits.

    Keywords: Cost vs Benefits; Microfinance; Insurance; Risk Management; Banking Industry; India;

    Citation:

    Cole, Shawn, and Peter Tufano. "BASIX (Abridged)." Harvard Business School Case 213-035, September 2012.
  8. Social Finance, Inc.

    Social Finance attempts to design and launch a complex new financial instrument that will entice private capital to invest in social service provision.

    Keywords: Financial Instruments; Investment; Social Enterprise;

    Citation:

    Cole, Shawn, Rawia Abdel Samad, Matt Berner, and Raluca Dragusanu. "Social Finance, Inc." Harvard Business School Case 212-055, December 2011. (Revised March 2013.)
  9. China Life: Micro Insurance for the Poor

    China Life must decide whether to accept the government's "invitation" to develop a microinsurance product for the rural poor. Can it be done profitably?

    Keywords: Social Enterprise; Insurance; Insurance Industry; China;

    Citation:

    Cole, Shawn, and Lilei Xu. "China Life: Micro Insurance for the Poor." Harvard Business School Case 212-030, November 2011. (Revised March 2013.)
  10. SKS and the AP Microfinance Crisis

    SKS, India's leading microfinance firm, is challenged when politicians declaim microfinance as exploitation of the poor and severely restrict business practices.

    Keywords: Microfinance; Government Administration; Policy; Capital Markets; Crisis Management; Poverty; Financial Services Industry; India;

    Citation:

    Cole, Shawn, and Yannick Saleman. "SKS and the AP Microfinance Crisis." Harvard Business School Case 212-018, October 2011. (Revised March 2013.)
  11. UBS and Auction Rate Securities (B)

    Supplement to 209119

    Keywords: Debt Securities;

    Citation:

    Bergstresser, Daniel Baird, Shawn A. Cole, and Siddharth Bhaskar Shenai. "UBS and Auction Rate Securities (B)." Harvard Business School Supplement 209-131, March 2009. (Revised October 2011.)
  12. UBS and Auction Rate Securities (A)

    UBS, a global financial services company, must decide whether to continue to support the market for Auction Rate Securities in the face of a growing financial crisis. These instruments, underwritten by UBS, were marketed to clients as highly liquid and safe alternatives to cash. UBS' decision becomes urgent when Citigroup, another leading underwriter of ARS, decides to let their auctions fail, leaving clients with illiquid assets of uncertain value. The case explores theoretical and practical aspects of liquidity risk, and challenges students to evaluate the benefits of honoring implicit commitments to customers against the costs of acquiring billions of dollars in illiquid assets. The (B) and (C) cases consider the implications of UBS decision.

    Keywords: Cost vs Benefits; Financial Crisis; Asset Pricing; Financial Liquidity; Financial Instruments; Government Legislation; Risk and Uncertainty; Financial Services Industry;

    Citation:

    Bergstresser, Daniel Baird, Shawn A. Cole, and Siddharth Bhaskar Shenai. "UBS and Auction Rate Securities (A)." Harvard Business School Case 209-119, March 2009. (Revised September 2011.)
  13. BANEX and the No Pago Movement (A)

    This case examines Grassroots Capital's decision of whether or not to continue investing in a Bolivian microfinance bank that is suffering financial distress.

    Keywords: Risk and Uncertainty; Government and Politics; Microfinance; Insolvency and Bankruptcy; Investment; Safety; Financial Services Industry; Bolivia;

    Citation:

    Cole, Shawn, and Baily Blair Kempner. "BANEX and the No Pago Movement (A)." Harvard Business School Case 211-092, April 2011. (Revised March 2013.)
  14. BANEX and the No Pago Movement (B)

    This case examines Grassroots Capital's decision of whether or not to continue investing in a Bolivian microfinance bank that is suffering financial distress.

    Keywords: Decisions; Insolvency and Bankruptcy; Microfinance; Investment; Government and Politics; Crisis Management; Risk and Uncertainty; Financial Services Industry; Bolivia;

    Citation:

    Cole, Shawn, and Baily Blair Kempner. "BANEX and the No Pago Movement (B)." Harvard Business School Supplement 211-102, April 2011. (Revised March 2013.)
  15. UBS and Auction Rate Securities (C)

    Supplement to 209119 and 209131

    Keywords: Debt Securities;

    Citation:

    Bergstresser, Daniel Baird, Shawn A. Cole, and Siddharth Bhaskar Shenai. "UBS and Auction Rate Securities (C)." Harvard Business School Supplement 209-135, March 2009. (Revised April 2010.)
  16. UBS and Auction Rate Securities (TN) (A), (B), and (C)

    Teaching Note for [209119], [209131], and [209135].

    Keywords: Financial Services Industry;

    Citation:

    Cole, Shawn A., Daniel Baird Bergstresser, and Siddharth Bhaskar Shenai. "UBS and Auction Rate Securities (TN) (A), (B), and (C)." Harvard Business School Teaching Note 209-122, April 2009.
  17. SKS Microfinance (TN)

    Teaching Note for [208137].

    Keywords: Venture Capital; Investment; Financing and Loans; Valuation; Social Enterprise; Equity; Financial Markets; Microfinance; For-Profit Firms; Financial Services Industry; India;

    Citation:

    Cole, Shawn A. "SKS Microfinance (TN)." Harvard Business School Teaching Note 209-132, April 2009.
  18. First National Bank's Golden Opportunity (TN)

    Teaching Note for [208072].

    Keywords: Saving; Product; Interest Rates; Personal Finance; Cost vs Benefits; Risk and Uncertainty; Investment; Problems and Challenges; Demand and Consumers; Product Launch; Banks and Banking; Banking Industry; South Africa;

    Citation:

    Cole, Shawn A. "First National Bank's Golden Opportunity (TN)." Harvard Business School Teaching Note 209-123, April 2009.
  19. SKS Microfinance

    Vikram Akula, CEO of SKS Microfinance, seeks a venture capital investment to fund his firm. SKS, one of the largest and fastest growing microfinance institutions in India, is a profitable, for-profit institution with a social mission. In what is one of the first commercial financing deals in the world, Akula must decide at what value to sell equity in SKS, and to whom to sell it. The case focuses on valuation, which is difficult because at the time there are no publicly traded comparable companies, and the strategic aspects of raising money.

    Keywords: For-Profit Firms; Venture Capital; Microfinance; Corporate Social Responsibility and Impact; Valuation; Financial Services Industry; India;

    Citation:

    Cole, Shawn A., and Theresa Chen. "SKS Microfinance." Harvard Business School Case 208-137, May 2008. (Revised March 2009.)
  20. First National Bank's Golden Opportunity

    Executives at First National Bank in South Africa are considering whether to launch a potentially exciting, but rather unorthodox, new savings product. Instead of paying interest, this product gives depositors the chance to win large cash prizes each month. Michael Jordan, CEO of the bank's Consumer Solutions Division, must decide whether to approve the product, weighing the potential benefits against large upfront investment, uncertain market demand, and the complication that the product might face legal challenges.

    Keywords: Decision Choices and Conditions; Banks and Banking; Investment; Innovation and Invention; Product Launch; Demand and Consumers; South Africa;

    Citation:

    Cole, Shawn A., Peter Tufano, Daniel Schneider, and Daryl Collins. "First National Bank's Golden Opportunity." Harvard Business School Case 208-072, October 2007. (Revised March 2008.)
  21. BASIX

    BASIX, an Indian microfinance corporation, must decide whether to continue to sell weather insurance to its clients. A brand-new financial product, weather insurance pays if measured rainfall during the growing season falls below a pre-specified limit. Mr. Sattaiah, managing director of the BASIX's bank, considers a revised insurance policy for the coming season, weighing the costs and potential risks of expanding the product against the potential benefits.

    Keywords: Cost vs Benefits; Microfinance; Insurance; Risk Management; Banking Industry; India;

    Citation:

    Cole, Shawn A., and Peter Tufano. "BASIX." Harvard Business School Case 207-099, February 2007. (Revised October 2007.)
  22. BASIX (TN)

    Teaching note to (207-099) and (207-108).

    Keywords: Financial Institutions; Insurance Industry;

    Citation:

    Cole, Shawn A. "BASIX (TN)." Harvard Business School Teaching Note 208-017, September 2007.
  23. BASIX Simulation Model

    Explains how to use Crystal Ball to simulate the insurance decision in the BASIX case.

    Keywords: Insurance; Business Model; Valuation; Decisions; Finance; Insurance Industry;

    Citation:

    Tufano, Peter, and Shawn A. Cole. "BASIX Simulation Model." Harvard Business School Background Note 207-108, February 2007.

Other Publications and Materials

  1. Is High School the Right Time to Teach Self-control? The Effect of Financial Education and Mathematics Courses on Savings Behavior

    Household financial behavior affects household welfare and the economy at large. Yet our understanding of how to improve financial decisions is limited. Recent literature and policy attention have focused on financial education, for example, in high school. We use variation in state reforms on high school graduation requirements to examine the impact on asset accumulation. In contrast to previous research, we find that state mandates requiring students take a financial literacy course do not affect the propensity to save. We also find that state reforms increasing the number of required math courses improve financial behavior for women, but not men.

    Keywords: Saving; Financial Management; Secondary Education; Behavior; Decision Choices and Conditions; Personal Finance; Household Characteristics;