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Joint Research Initiative


Understanding the Financial Lives of Low Income Households in China

A Joint Research Initiative between the AXA Research Fund, AXA Emerging Customers and the Chinese Academy of Financial Inclusion at Renmin University of China
Watch the video and read the presentation of the project below

Leveraging financial diaries research methodology, this joint initiative aims to provide actionable insights about the financial lives of low-income households in China’s urban and rural areas to encourage financial service providers to further deepen financial inclusion. 

Appropriate financial services—such as payment services, savings accounts, loans, and insurance— can contribute to inclusive growth and economic development [1].  According to the World Bank’s 2017 Global Findex, a comprehensive data set on how adults save, borrow, make payments, and manage risk, roughly 80 percent of adults in China report owning a transaction account at a regulated financial institution [2].  However, account ownership grew only 1 percent from 2014 to 2017, indicating stagnation in completing the last mile of financial inclusion. Many of the remaining unbanked adults in China are lower income or reside in poorer rural areas. Even when low-income individuals own an account, they often do not save or use it with the same frequency as other demographic groups and may not benefit from advances in digital financial services in China. The digital divide is still present despite the recent progress as reported by the People’s Bank of China’s 2019 China Inclusive Financial Indicators Analysis Report: the penetration of electronic payments continues, and the rural-urban gap has narrowed, with the proportion of adults using electronic payments in rural areas reaching 76% [3].  

Low personal savings and economic resilience concern rural communities as well as urban areas, where a knowledge gap in understanding financial access persists. According to the Financial Access Initiative, a research center based at NYU that explores how financial services can better meet the needs and improve the lives of poor households, less than 20% of low-income earners in most countries view their savings as their primary defense against shocks, whether they live in rural or urban areas [4].  During a global pandemic, the top earners are more likely to draw on their savings when faced with economic shocks.

Better financial solutions, such as insurance adapted to low-income households and businesses, could allow them to better manage risk and cope with other aspects of life. Improving their ability to smooth consumption, for instance, can reduce the current practice of having to make spending tradeoffs between food, healthcare, and school costs.

In China, research on household finance and economic development in the past decade has mostly focused on the impact of microcredit. In recent years,  the focus has shifted towards inclusive insurance. Inclusive insurance, which seeks to provide appropriate and affordable insurance products for those not served by traditional insurance, especially vulnerable and low-income populations, is now part of China’s national financial inclusion strategies.

Using the Financial Diaries methodology,  Dr. Xiugen Mo and his team at the Chinese Academy of Financial Inclusion (CAFI), Renmin University, seek to better understand the financial service needs of both households and small businesses. 

Building on the first round of the rural Financial Diaries survey sponsored by the World Bank in 2019-2020 and adding a new sample in urban areas, this Joint Research Initiative will focus on narrowing existing research gaps such as understanding the financial lives of urban households vis-à-vis their rural counterparts and the medium-term impact of COVID-19 on financial behaviors and needs, and expanding the analysis of low frequency risk and related insurance needs, with a particular focus on all aspects of healthcare.  The goal is to better inform the design of adapted products which can build financial resilience among low income households and businesses.

The Financial Diaries methodology [5] will allow for the collection of in-depth, finely grained data on the financial lives of households. While qualitative data is also collected and used to offer perspective to individual stories, the bulk of the effort resides in gathering quantitative data about transactions at the household and household member level. Based on both qualitative and quantitative methods, the study will use an ethnographic approach to understand financial decisions and behaviors.

The project is a joint research initiative between AXA Emerging Customers, the CAFI at Renmin University of China, and the AXA Research Fund. While CAFI will conduct the study, AXA will provide its global experience in financial inclusion and contribute to the analysis and report writing, as well as help disseminate the results to various audiences in China and across the globe.

[1] Asli Demirguc-Kunt, Leora Klapper, Dorothe Singer (2017). Financial Inclusion and Inclusive Growth. World Bank Group Policy Research Paper.

[2] Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution (



[5] Pioneered by Stuart Rutherford at the University of Manchester in 1999,[1] this methodology is based on researchers visiting a sample of families every two weeks to interview them about financial activity and life events.



Chinese Academy of Financial Inclusion