Financial Education Win-Win for Clients and MFIs
What is Financial Education? Financial education is teaching the knowledge, skills and attitudes required to adopt good money- management practices for earning, spending, saving, borrowing and investing. Participants who receive financial education acquire the information and tools to make better financial choices and work towards their financial goals to enhance their economic well-being.
Why is Financial Education Important for the Poor? Better understand financial options Use financial resources more effectively Build self-esteem and confidence Shift from reactive to pro-active decisions
Financial Education Objectives Current Desired Behaviors Current Behaviors Desired Behaviors
Examples of Behavior Change Savings Wasteful expenditures Irregular savings Savings not linked to goals Savings Avoid unnecessary expenditures Have a savings plan Save regularly FINANCIAL EDUCATION PRESENT/CURRENTFUTURE/DESIRED
How was the Financial Education Curriculum Developed? The Partners India – SEWA Bank Philippines – CARD Bank South Africa – Teba Bank Morocco – Al Amana Bolivia – Pro Mujer Poland – The Microfinance Centre
Module Design Process Market Research Module Design Module Pilot Test Module Refinement Generic Module Design Generic Module Test Finalize Generic Module Dissemination TOT
Curriculum: Modules Budgeting- Use Money Wisely Debt Mgmt.- Handle with Care Savings- You Can Do It! Banking Services- Know Your Options Financial Negotiations- Communicate with Confidence
Curriculum: Components Trainers Guides Training of Trainers Manuals Implementation Guidance –Adaptation Guide
Training Techniques Small Group Discussions and Activities Stories Categorization Simulation Exercises Case Study or Situation Analysis Practice Exercises
Channels of Delivery Campaign Radio Show Soap Opera Classroom Training Credit and Savings Group-based Individual Counseling Volume of Outreach
Why is Financial Education Important to MFIs? Better meet client demand Gain competitive advantage Improve portfolio performance Enhance position as socially responsible institution
Financial Education Provider Institutional Mission Corporation/trade associationIndustry wide education MFI: Marketing and PromotionImproved performance Training Provider (Fee for service) Training services for low income households Community Development Program (social program) Better management of community members assets
Modes of Delivery Parallel – Two or more programs or departments in same organization Linked -- Two collaborating but independent organizations (e.g. training NGO and MFI) Unified – Integrated services delivered by same staff in an organization
Challenges Literacy levels Adaptation to market segments Lifecycle position
Current Activities DISSEMINATION TOT Workshops South/South East Asia Central America Middle East China India Eastern Europe In-country Training and TA
Current Activities INNOVATIONS Youth Remittances Micro-insurance Risk management Consumer Education Bank Cards