For families to get ahead, they need access to financial products and services. However, many people in India don’t understand how to use these tools well, so they avoid them and avoid planning for the future. This leaves them vulnerable to predatory lending, overselling, and fraud, and it can lead to crippling debt and poor financial management. Financial education can make all the difference by helping people to build financial capabilities. Armed with the knowledge, skills, and self-efficacy needed to make the best money management decisions available, individuals can finally reach their economic potential.
For roughly two decades, Accion has included education and training services as important components of its financial inclusion work. As part of its client education programs in India, Accion has partnered with Axis Bank to deliver programs inlcuding Mass Awareness Campaigns and the Money Plan Program. The former focuses on spreading awareness of basic financial concepts and the latter on creating awareness about the importance of keeping track of debt, savings, and expenses. Women are the main beneficiaries of these programs, which focuses on developing their decision-making skills to effectively drive women’s empowerment.
Mass Awareness Campaigns
Mass Awareness Campaigns focus on spreading financial literacy to low-income households across India, primarily in rural areas. The program uses tools like street plays, drama, and magic shows to teach all aspects of people’s financial lives, including earning, spending, saving, borrowing, and investing. It spreads awareness of good spending habits, monthly budgeting, identifying appropriate institutions, and avoiding risks. For many clients, this program is crucial for building initial awareness, inspiring financial conversations among family and neighbors, and driving them to seek out additional training. More than 15,000 individuals have participated in these campaigns, and many have gone on to take part in the Money Plan Program.
From awareness to the Money Plan Program
The Money Plan Program is a three-day in-depth workshop which focuses on building a deeper understanding of critical financial concepts. It focuses on improving the financial capacity of low-income women by giving them the tools to maintain their personal and household accounts efficiently. Through a set of modules, participants learn about financial planning, cash flow and budgeting, savings, debt, investment, insurance, and banking.
The initial results of the impact of program are promising. A survey of 9,000 women showed that it promoted significant behavior changes, especially in terms of financial discipline and budget planning. After the workshop, respondents reported a 27 percent increase in savings and an 18 percent increase in the use of bank accounts for saving. Interestingly, it wasn’t only attendees who benefitted. Respondents shared that after the program, their spouses also engaged in the financial planning exercises and in joint decision-making.
The road ahead for financial education programs
While the initial impact has been positive and women have been excited to use interactive tools for building their financial capability, scaling the programs has been challenging. They require large human resource investments, both in terms of time and money. Additionally, the programs do not permit real-time collection of data, which makes supervision and monitoring time-consuming and costly.
India is the world’s second-largest smartphone market and is expected to add over 330 million mobile subscribers by 2020. Many of the new mobile and internet users have experience learning on digital platforms. This gives us the opportunity to build people’s financial capability through online and mobile channels. Mobile-based delivery of information, available whenever and wherever the learner needs it, would reach communities at greater scale than in-person programs currently can.
Accion has already rolled out such tools in Latin America. The platform Ovante is helping entrepreneurs build and enhance their business skills, grow their enterprises, and adopt healthy habits for using financial products and services. Users access the platform on their mobile phone or computer and receive information and tools to improve their business in real time. Based on the experience in Latin America, Ovante will be tailored for the Indian market and will aim to provide low-income microentrepreneurs with the tools they need to run their businesses and support their families and communities.
Arisha Salman contributed to this article.