You are currently browsing the tag archive for the ‘Financial Literacy’ tag.
> Posted by Jeffrey Riecke, Communications Assistant, CFI
Last month the Sudan Academy for Banking and Financial Sciences delivered financial literacy training to more than 1,000 credit agents. The training was given as part of a larger microfinance development program the Academy provides to Sudanese financial sector staff.
The literacy trainings covered a wide range of financial literacy topics, including budgeting, saving, financial negotiations, debt management, and basic familiarity with financial services. These are topics the credit agents may be able to use in their own lives, but more broadly, the credit agents are seen as the carriers of financial education messages to their clients. That is why the training also included such core client-relationship skills as listening and effective communication.
> Posted by Jeffrey Riecke, Communications Assistant, CFI
There are endless ways to measure the successes of a given year. Number of clients reached. Total new stakeholder endorsement. Amount of capital invested… Though when assessing almost anything, it’s important to think holistically and not be biased by the numbers. That said, I think I can speak for most of the Center in saying that we are excited to share that several CFI-affiliated publications were among the Microfinance Gateway’s Most Popular Publications of 2012. No small feat considering 546 new resources were added to the Gateway this past year. Here’s a brief listing of the CFI pubs that made this top cut:
Over-Indebtedness in Microfinance: An Empirical Analysis of Related Factors on the Borrower Level
This paper by Jessica Schicks analyses the over-indebtedness of microborrowers in Ghana, examining its relationship with poverty, adverse shocks, loan returns, and financial literacy. In defining over-indebtedness, the paper adopts a client perspective, taking into account clients’ repayment struggles and the sacrifices they make to fulfill payment obligations. Some of the paper’s findings are the following: Read the rest of this entry »
> Posted by Merene Botsio, Financial Inclusion 2020 Project Coordinator, 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.”
Huddled in the crowded lobby of the Sheraton Arlington hotel at the annual SEEP Network Conference, we listened intently to Syed Mohsin Ahmed as he elaborated on Pakistan’s new Microfinance Credit Information Bureau (MF-CIB). We scribbled in our notebooks, taking down points for the Financial Inclusion 2020 Credit Reporting and Client Information Analytics Experts’ Working Group, of which he is a member.
> Posted by Elisabeth Rhyne, Managing Director, CFI
Monique Cohen just stepped down as head of Microfinance Opportunities, the non-profit organization she founded ten years ago. She is leaving MFOpps in very capable hands. Guy Stuart, formerly of the Kennedy School of Government, has already started as the new CEO. This change of leadership provides a good moment to pause and recognize the significant contributions Monique has made not only through Microfinance Opportunities but also as a researcher and thinker about microfinance clients.
Monique staked her position from the start as a champion for the client. She argues that anyone offering financial services to the poor needs a deep understanding of, and even empathy with, the poor. And by empathy, I do not mean sentimentality, but the intent to fully listen to and be guided by what low income people say about their situation and their views. This requires a market researcher to set aside preconceived ideas as much as possible, and draw conclusions from client-based evidence, both qualitative and quantitative.
By looking at prospective clients carefully, Monique generated important insights. And since I’ve known Monique quite a long time, I remember when she first talked about some of them. In fact, many of Monique’s insights became part of my own understanding about money and the poor. My first lesson from Monique was about how people in Andean cities finance the construction of their houses through incremental, one-room-at-a-time building patterns. This insight is at the basis of successful housing microfinance in Latin America, which offers relatively small short term home improvement loans to support that process.
> Posted by Amanda Lotz, Financial Inclusion 2020 Project Coordinator, CFI
Schwab Foundation describes a social entrepreneur as possessing a healthy impatience. Leila Janah arrived on a red eye to Washington to speak at the Business Civic Leadership Center (BCLC) and then traveled back to San Francisco for another engagement that afternoon. I’d call that a little healthy impatience.
I was fortunate to attend the Global Corporate Citizenship Conference at the BCLC in the company of a highly socially conscious audience to listen to Janah, founder and CEO of Samasource.
Initiated in Kenya in 2008, Samasource provides people at the base of the pyramid, currently earning less than a living wage, with the opportunity to earn a sustainable source of income in support of complex digital projects needed by large enterprises, such as Google and eBay. Through in-country partners, employees are recruited and validated. Using the internet, Samasource equips its employees with technological skills and 2-4 weeks of training. It then connects them to digital work that requires a “human touch” and is not easily completed by automated systems. Even better, the target employees of Samasource are women and youth (two client populations to consider when discussing current financial inclusion challenges). Since its inception, Samasource has expanded operations to a total of nine countries, including India, Haiti and Pakistan – more evidence of healthy impatience.
>Posted by Center Staff
Microfinance Transparency recently released an interactive video designed to share information about flat and declining interest rates in an engaging new way. It tells the story of “Chantal” and “Auntie-Need-a-Loan.” Auntie doesn’t read the terms and conditions of her loan. Unfortunately, her carelessness leads her to get tricked by loan predators, pay high fees, miscalculate her interest, and miss her loan payments. The concept was created to help industry stakeholders to convey important pricing transparency and consumer protection messages.
In addition to this animation, “Auntie-Need-a-Loan” will be featured in radio public service announcements, training materials and other print materials throughout Rwanda and Malawi.
Check out the full animation here!
Image credit: 17triggers.com
Have you read?
A Call for Caution in Judging the Merits of Financial Education: A Review of ‘Bridging the Gap‘
Structure for Success: Lessons from a Kenyan Financial Literacy Teacher
> Posted by John Gitau, CEO, Kenya Financial Education Centre
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to , Fellow, Center for Financial Inclusion at Accion.
As I mentioned in a blog post yesterday, financial literacy is a recipe that does not come together automatically, even if you seem to have all the right ingredients. You may have funding, but the funding could come with unrealistic expectations. You may have students, but the students may not have a good reason to pay attention to the lessons financial literacy training offers.
While I am new to the Financial Inclusion 2020 campaign, I am certain that full financial inclusion, with fully financially capable clients, will not happen without a sound structure to support financial literacy efforts. Read the rest of this entry »
> Posted by John Gitau, CEO, Kenya Financial Education Centre
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to , Fellow, Center for Financial Inclusion at Accion.
I have taught financial literacy in East Africa for the past eight years, and have managed my own firm for the past four. And here is one thing I have noticed: the financial inclusion community as a whole does not have a common definition or goal for financial education. This lack of an agreed-upon definition makes difficult the process of creating financially capable populations.
Here is how I define key terms:
Financial education is the process of teaching the knowledge, skills and attitudes necessary in personal money management. The end result of financial education is financial literacy. Financial literacy is the ability to manage personal money well. But financial literacy is not an end in itself. It is a tool which when used well results in financial capability. Therefore, financial capability is the ability to apply financial literacy in personal money management to improve financial well-being. When a financially literate person takes action in a way that results in better money use, we say such a person is financially capable.
Not everyone maintains these definitions and goals, though. MFIs, corporations, NGOs, and SACCOs (savings and credit cooperatives) each come to me with different goals, some impossible to achieve. MFIs want me to teach their clients quickly so that they can improve on their loans repayments and increase saving. They are not keen on me teaching investment and some even warn me to be careful when handling the topic of the use of financial services. They want me not to dwell on costs but emphasize benefits. I sometimes find these requests quite amusing. Read the rest of this entry »
> Posted by Leah Wardle
A kid named Boyie is a popular radio disk jockey in Kenya. At 19 years old, he has a nationally syndicated radio show playing daily on 21 stations and half of Kenya’s mostly low-income youth say they’ve listened to him. He’s so popular that he also stars in his own monthly comic book series, Shujaaz (“Heroes”), read by about 10 million people in the past 20 months. The ladies love him and the guys copy his dreadlocks. But someone else answers his calls, texts, and Facebook messages (which flood in by the thousands), because Boyie is a cartoon character.
A cartoon character can be more powerful than a real person when it comes to influencing the thoughts and behavior of Kenyan youth, argues Rob Burnet, director of Well Told Story, the Kenyan communications company behind Boyie and Shujaaz. He and his team are using virtual characters to reach Kenyan teenagers through comic books, radio shows, and virtual media with messages of social change. Their methods may hold creative new ideas for microfinance practitioners looking to connect with clients.
It’s something else to witness the compelling struggle of a teenage head-of-household, living in a slum, facing multiple challenges and pleading siblings, yet still setting aside a little bit each week. Now tell the story with colorful images and dramatic plots that resonate with the experience of the audience, and deliver through easily available media, and they readily absorb the messages as they follow the lives of the quirky characters.
Microfinance practitioners might take a page from Shujaaz to increase the transparency of financial information for clients. Transparency means providing full information (like detailed product terms and prices) in a way that is meaningful to the client. That means clients can absorb the information because it’s presented in their own language, and they feel comfortable with the medium. To reach this goal, Well Told Story’s model would suggest practitioners ask themselves three important questions: Read the rest of this entry »
> Posted by Rosita Najmi
The following is a continuation of an earlier blog post available here:
“Save Steady. Dream Huge.” is the tagline of San Francisco’s Kindergarten to College Program. Currently, students at nearly 40 schools (and by 2012 district-wide) automatically get a college savings account at Citibank, with an initial $50 deposit made possible by the City and County of San Francisco. The children and their families can make contributions to this deposit only account in person, by mail, or online as frequently as they like, in small or large quantities, up to $2,500 per year. Among other incentives to encourage savings is a match of the first $100 saved, and more incentives are forthcoming.
Once the student graduates from high school, s/he can apply the savings towards tuition, books, and other education-related expenses for (public or private) college, community college, graduate school, or other kinds of training programs. Foreign institutions may also be eligible. A public-private-partnership among the San Francisco Mayor’s Office, the Treasurer’s Office of Financial Empowerment, the Department of Children Youth and Families, the San Francisco Unified School District, EARN, CFED, the San Francisco Foundation, the New America Foundation and Stanford University created this head start to financial inclusion and savings.
The SallieMae Fund also has a similar program, which since 1992, has been building excitement about college in young students and already reached 70,000 students. Its Kids2College program seeks to “Open Doors to Higher Education” and starts with middle school students.
Such a head start to financial citizenship has capacity for significant long-term impact. As we wait for the conclusions and learning from the various ongoing efforts mentioned in a previous post, here are a few personal experiences that I imagine will be revealed among the studies and interventions.
A head start to financial citizenship can:
- Foster Dialogue: While conversations about money started with my mom and older siblings, they have expanded to dialogue with my friends, neighbors, parents of my friends, and now my husband. Money has become less of a taboo topic and instead, we share techniques and best-practices ranging from credit cards to taxes. Just as we would share recipes or restaurant reviews, we’ve exchanged stories about credit reports, IRAs, and student loan management. Each month, my husband and I hold budget meetings, where we review our numbers and progress towards our financial goals, responsibilities to our families, and opportunities of philanthropic giving.
- Encourage Planning: Knowing at a very young age that my parents not only lacked the financing to send me to college, but also that they would soon need an allowance of support from me spurred me to action and also managed my expectations. As a young child, I did not ask for toys and candy while waiting in line at the grocery store check-out. In middle school, I began participating in various competitions, whether speech or essay contests, to start raising money for college. In high school, I began applying for scholarships my sophomore year. Early planning and a future orientation enabled me to be (i) financially independent upon graduation from high school (ii) start sending money home at the completion of college and (iii) self-finance a year of volunteer work, my wedding, and down payment on an apartment. This would not have been possible without a head start.
- Practice Habits: I also think it made a difference for me to start my personal relationship with finance via savings instead of credit. In fact, it has resulted in an orientation toward credit, where I only considered it when necessary to finance graduate school and for a mortgage. Starting young allowed me to practice saving up toward a specific goal and instilled in me the time value of money which helps me overcome some of the biases that research in behavioral economics and the psychology of savings are revealing about barriers to saving. Starting early almost created the same affect—the same discipline—that many develop from debt.
- Enable Financial Competency: Finally, an early start enabled me to diversify the sources and types of financial education from which I benefitted. I recall attending workshops at my local library in Tennessee on budgeting; participating in webinars provided by some of the sources of my college scholarships regarding credit; reading books and blogs about investments; and joining workshops provided by my personal banks or the human resources and staff associations of my employers. Cumulatively and over time, I gained the knowledge and attitude towards financial competency. Each intervention provided new lessons, and I still have much to learn.
- Secure a Safe and High Quality Financial Passage: I think all of these experiences are like stamps in a financial passport. They each have contributed to my personal financial citizenship, and hopefully, they will enable me to create financial inclusion and opportunities for others, whether in my personal or professional capacities. These experiences also inform why I believe in initiatives like FAB (Financial Access at Birth), which aim to challenge the process, to make us think differently about whether financial citizenship can start at birth, and how interventions like financial education can ensure a safe and quality experience.
Image credit: ACCION International
Facebook
Twitter
Recent Comments