> Posted by Anita Gardeva, Senior Analyst, CFI

The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”

A who’s who of the global financial education community came together this month at the ninth annual Citi-FT Financial Education Summit in Manila. I was excited to attend this signature event, organized by the Citi Foundation, the Pearson Foundation, and the Financial Times, and I took home a number of important insights. Most importantly, it is clear that we need much more information and evidence about what works in regards to building financial capability.

Three additional takeaways strongly resonated with me:

Targeting a niche population with tailored financial education and simple messaging can work. John DaSilva of the Kenan Institute Asia described the institute’s Citi At-Risk Women Financial Literacy Program, which provides highly specialized and interactive financial education to poor at-risk women in Bangkok, such as nightlife workers and prisoners. Education content and delivery is specifically relevant for the women’s lifestyles and daily financial needs. The message is simple: start budgeting and start saving.

The results so far are promising, and an important lesson learned is that there is a tradeoff between providing financial education at scale (less expensive, more general, unknown efficacy) versus targeting a niche population (more expensive, tailored, high potential for impact).

Financial education as a separate core-curriculum in schools is part of the solution. The governments of several countries are incorporating financial education into their nations’ core curricula for public schools. There is widespread agreement that teaching financial education to young children should be as basic as teaching math, and indeed, the theme of the Summit was “Financial Capability as a 21st Century Life Skill.”

At the same time, there was also agreement that while financial education in schools is an important basic step for building financial capability, it is not enough. More work by diverse actors is needed to transform financial capability into a social norm valued by all and to move individuals from having knowledge and understanding to making good financial decisions.

Changing behavior is a tremendous task—much more ambitious than the tools we are using. Richard Hinz from the World Bank’s Russia Financial Literacy and Education Trust Fund, was one of several people who highlighted the challenges human nature presents in building financial capability. Human beings have evolved to focus on the short term, to discount the future, to fear loss more than they value gain, to experience paralysis when too many choices are given, to stick with the default option, and to make poor decisions when under stress. The good news, however, is that by investing more time in understanding these specific challenges, we can find solutions that help us guide human behavior towards improved financial behavior.

For more information and highlights from the 9th Citi-FT Financial Education Summit, visit www.financialeducationsummit.org.

For more information on Financial Inclusion 2020, sign up for campaign updates.

Image credit: philSTAR

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