Financial Literacy creates demand for financial products & services, thereby accelerating the pace of financial inclusion as it enables the common man to understand the needs and benefits of the products and services offered by the banks. All segments of the society need financial literacy in one form or the other. However, considering that a large segment of our society is financially excluded, financial literacy programs, at present, should primarily focus on the individuals who are vulnerable to persistent downward financial pressures due to lack of understanding in the matters relating to personal finance. On my visit to remote villages under outreach programs, I found that the primary challenges in improving the effectiveness of financial literacy programs is the non availability of standardized basic curriculum to be conveyed to the target group. This guide has been prepared to ensure consistency in the messages reaching the target audience from various sources, thus making them more focused and purposeful. I am sure that it will create huge demand for banking services from the common man. The guide is meant to be used by branch managers of rural branches of banks and Lead District Managers for their monthly financial literacy camps. The guide can also be used with suitable customization for educating various segments of urban excluded people. Banks need to gear up their machinery for conduct of financial literacy programs and simultaneously provide their customers affordable and user friendly access.
The following documents are recommended as additional reading material for participants wishing to further develop their knowledge in this topic. Please follow the links below to download the documents directly from the Rural Finance Learning Centre.
- Sources of funds for agricultural lending
- Financial sector reforms and savings mobilization in Zambia
- Remittances and rural development
- The MBP guide to new product development
The following documents are recommended as additional reading material for participants wishing to further develop their knowledge in this topic.
The following documents are recommended as required reading for this module. They should be distributed to course participants in advance of the course or session.
- CARE International’s village savings & loan programmes in Africa
- Caisses Villageoises d’Epargne at de Crédit Autogérées (CVECAS), Niono, Mali
- Member-based financial organizations
- A technical guide to rural finance: exploring products
The emphasis in this first booklet is on savings and how essential it is for everyone to be able to set aside money for future use. Cash flow patterns, produced with or without numbers, are introduced as a vital tool for someone to take stock of their current situation and determine when and how much they could expect to save over the course of a typical year. Even though borrowing may be used to overcome a shortage of current funds, this is simply advance use of future income and savings must be made from that future income to repay the loan.
Step by step instructions for preparing a cash flow plan are included, together with various forms that may be used in the planning process. The emphasis is on helping people understand their current cash flow rather than planning a new business enterprise. Copies of all the forms used in the booklet are available as downloadable word documents or excel spreadsheets, which can then be printed out in whatever numbers are required.
The final section looks briefly at alternative methods of saving and the role of financial service providers.