1. Why Financial Literacy is Important for Financial Inclusion Indian School of Microfinance for Women

2. Financial Inclusion seeks to: Increase financial outreach to under- served and un-served populations. Improve access at a reasonable cost to these populations to a range of financial services and products.

3. Characteristics of Financial Exclusion 1.Lack of access to services/products. 2.Lack of perception of the value of availing of formal services/products. 3.Lack of information and knowledge of services/products. 4.Inability to chose between alternate services/products

4. Formal institutions like banks seek to address financial inclusion by: Educating people about available services/products.- (financial education). Reaching clients. Being client friendly. Making access to ‘no-frill accounts’ easy. (as a beginning).

5. There is a latent unmet demand for financial service/products. However there is also need to understand the lives and constraints of the poor. Poor have earning and spending patterns that are peculiar to their state of poverty. This in turn determines their savings patterns.

6. Financial Institutions have been more successful in tapping latent demand when they ‘look through the eyes of the clients’. Things that matter: Who you are Where you live How you make your living

7. Understanding the poor and their world of work allows us to understand their earning and expenditure patterns. This understanding has been used to create a curriculum of ‘financial literacy’ that combines reflection and introspection.

8. What is financial literacy? Awareness, knowledge and skills to make decisions about savings, investments, borrowings and expenditure in an informed manner.

9. CITIGROUP CENTRE FOR FINANCIAL LITERACY Indian School of Microfinance for Women

10. Genesis…. Financial Literacy was initiated by SEWA Bank in June 2002 Focused within Gujarat ISMW started CCFL in 2005 with a commitment to spread it across the country.

11. Objectives Spread awareness and build skills of poor women on Clarity of financial concepts. Making better financial decisions Accessing financial products & services Building assets Overcoming vulnerability Planning towards economic security

12. Approach TNA with a prospective partner mFIs Campaigns with the ultimate beneficiaries Concept Sharing workshop Monitoring and Evaluation Training of Trainers Impact Assessment

13. Components Concept Sharing Workshop and Campaigns Training of Trainers (ToT) Research

14. Fundamentals of Financial Planning Life-cycle needs Financial Decisions Components of Financial Planning Planner V/s Non- Planner Current Status V/s Planned Status Cash Dealing to Managing Finances

15. Mature Borrowings When-How and Why we borrow; from Whom Pre and Post Borrowing Factors Reducing vs. Flat Rate of Interest Borrowing for Productive purpose Options available for borrowings How much debt should one take

16. Smart Savings How to Save Concepts in ‘Savings’ Saver V/s Spender Deciding your goals Relationship between income/expense and savings

17. Wise Spending Define consumption: Need vs. Want Avoid wants and spend judiciously on needs Managing Big-Ticket Expenses Creating a Need Account

18. Intelligent Investments Financial Independence Make a Financial Plan Make a Budget Keep Investing Mitigate Risk Capital Formation

19. A Glimpse of the Activities so far

20. Financial Literacy Workshops & Campaign DateName of MFIs/Organizations State/RegionNo of Participants in the workshop No of Participants in the Campaign 2 nd February 2004 SEWA BankGujarat, Ahmedabad. 58- 4 th -6 th January 2006 ChaitanyaMaharashtra, Pune 40800 1 st – 3 rd February 2006 SEWA IndoreMadhya Pradesh, Indore 23350 1 st – 3 rd March 2006 Centre for Youth and Social Development Orrisa33350 4 th – 6 th April 2006 Bullock Worker’s Development Association Tamil Nadu, Pondicherry 461000

21. Conti… 31 st May- 2 nd June 2006 Ankuram Sangamam Poram Andra Pradesh, Hyderabad 30100 6 th – 8 th July 2006 Sarba Shanti Ayog(SASHA) West Bengal, Kolkata 30100 21 st June 2007 Campaign on Financial Literacy. Gujarat, Ahmedabad -1500 28 th July 2007 ShephardTamil Nadu, Trichy -500 10 th September 2007 Village Welfare SocietyKolkata-300 16 th – 18 th October 2007 Access Development Services. Madhya Pradesh: Bhopal, Gwalior -100

22. Training of Trainers (TOT) DateName of MFIs/Organizations represented State/Region (location of TOT) No of Participants in the TOT 5 th – 10 th December 2005 1.SWADHAAR 2.CYSD 3.SKS 4.Chaitanya 5.BWDA 6.SEWA Indore 7.SEWA Bank 8.SEWA Bharat 9.FPI Gujarat, Ahmedabad 17(from seven states) 19 th – 22 nd May 2006 Refresher training for ‘Chaitanya’ Gujarat, Ahmedabad 11 25 th – 26 th July 2006 Loyalam Bank ProjectManipur30

23. Conti… 19 th to 27 th February 2007 1.Development support team, Pune. 2.SHEPHARD 3.Village Welfare Society 4.Chaitanya 5.Annapurna Parivar 6.SWABHIMAAN 7.Grameen Koota 8.BISWA 9.SEWA Bank Gujarat, Ahmedabad 16 29 th July 2007ShephardTamil Nadu, Trichy 70 11 th – 12 th September 2007 Village Welfare Society (VWS) Kolkata18

24. Financial literacy can lead to financial wisdom Ability to manage money not just deal with it. Ability to use skills to take wise decisions for the future

25. A financially literate person can link her need for a product or service with those available within the banking system. A demand for financial inclusion is created through an appreciation for what is available.

26. The formal banking system will find a financially literate person easier to approach. A financially literate person will seek information about available services to operationalise her financial decisions and hence access what is available.

27. Financial literacy empowers the poor and women Financial literacy builds capacities to make decisions and take responsibility for those decisions. It increases their economic space.

28. Financial Inclusion empowers the poor and women Linkage to formal financial systems mainstreams poor producers. Self esteem increases when their productive lives include mainstreaming into formal systems.

29. Conclusion Financial literacy is a primary step for financial inclusion since introspection changes behavior which in turn makes people seek and receive financial services and products.

30. Thank You