1. Stage wise need of Financial Literacy in a Poor Household’s Life Cycle Parul Agarwal IFMR Research 4 th October 2013 1

2. Organization’s Approach Develops research ideas and research design to conduct studies using rigorous methodology. - Impact Evaluation using RCTs - Short-term Policy Research - Panel Studies - Short-term research like a snapshot/ case-study Partners with key stakeholders in an effort to translate research/ evidence based results into Policy and Practice. - Disseminating results through various publications and in person meetings with key stakeholders - Conducting conferences and Round-table discussions Conducts trainings and workshops for students and practitioners on research tools and methodology. 2

3. Introduction Parul Agarwal, a program head at IFMR Research, discussed the need for financial literacy in various stages of a household’s life cycle, particularly focusing on poor households who are prone to risks, have varied preferences and find it difficult to make right choices in the complex financial landscape they live in. After having identified the teachable moments in a household’s life cycle, the researcher presented the attributes of each of these stages, mentioning the most suitable products and topics of financial education, behavioral characteristics of the target, various methods of financial literacy that have already been tested across the globe and relevant findings from the same. Given that financial literacy programs are important but expensive and tricky to implement, she highlighted the existing infrastructure in villages, towns and schools that could be utilized for the purpose. The need and scope for further research towards establishing the best practices in this domain was also well acknowledged. 3

4. A Household’s Life Cycle 4

5. Teachable Moments 5 Basic habit of saving, Financial Numeracy Complex savings and investment products, Remittance Long term safe Savings and insurance Plans, understanding of debt burdens and interest rates Simple Savings and banking

6. Designing Financial Literacy 6 Stages Attributes Attention Span/ Cognitive Ability General points of Attraction Tried MethodsRelevant Findings School Going kids Starts evolving at age of 6. Take time to solve problems requiring abstract thinking. Are immature Don’t get emotions & concept of time. Games Social networking Learning by doing Comics Piggy banks No research has been done Youth (stepping into employment) Ambitious. Good sensory abilities. Memory skills are at peak. Logical thinking & reasoning abilities. Address adolescent need for adult independence, self reliance, & freedom from authority. Peer acceptance. Soap Operas Money games Simulation games Some studies show positive financial behaviour Adult Intellectually sharp Slow reaction time. Time for new learning decreases but ability does not change. Memory starts shrinking. Real life situations related to family, job, adversities, etc. Videos Indoor sessions Stories Activities Product specific Charts/ posters Changes in awareness and knowledge no evidence of behavioural change. Incentives work Link with product or livelihood. Old Low visual and auditory acuity Slower response to sensory stimulation Loss of recent memory Divided attention Perceived meaninglessness of task Parenting experience Religious events Adult Education Program Common gatherings No research has been done

7. Use of Available Infrastructure Anganwadi Centres Schools Computer Centres Village teachers Colleges Job sites/ Business Training Bundled with financial products Adult Literacy Centres Common Meeting Points 7

8. Scope of Research To study the impact of FLTs that account for behavioural aspects To study the FL models linked to formal education system Conduct panel studies with youth to understand the behavioural impact over longer run 8

9. Thank you 9 For any discussions or questions please contact Parul Agarwal on parul.agarwal@ifmr.ac.in