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Opening the door to financial education

by on Oct 17, 2011  |  posted in Microfinance, Youth  |  0 Comments

Image by UK Department for International Development

A new study from The MasterCard Foundation, Microfinance Opportunities, and Genesis Analytics provides an answer to the question: what does the current state of practice in financial education look like?


The report, Taking Stock: Financial Education Initiatives for the Poor, approaches issues of scale, sustainability, and impact—all with caution. The programs profiled are innovative and best viewed as pilots, or experiments in what works. To reach scale, initiatives will need to involve public players, such as ministries of education that wish to integrate financial education into school curricula, or central banks that see financial education as a means to support consumer protection. Scale will also come from the bottom up, as good programs demonstrate good outcomes and in turn attract new entrants. The FinLit Foundation in Uganda points to the value of public-private partnerships, in this case among the Capital Markets Authority, various governments (financial regulators), and private sector stakeholders like the Uganda Bankers’ Association.


The report reviews the experiences of 12 organizations worldwide.  It consists of case studies that explore a diverse set of financial education programs, such as GIZ’s SPEED Ghana, a multifaceted campaign to encourage bank services uptake; Population Council’s programs integrating financial education guidance into reproductive health programs for adolescent girls in Kenya and Egypt; and FINCA Mexico’s use of financial education to encourage usage of bank cards.  While financial education is still in its early days, the collected case studies explore how organizations can implement impactful, scalable, and sustainable financial education programs.


Interest in financial education programs for low-income consumers of financial services  has been growing. While the “unbanked” and “underbanked”  are skilled at managing financial resources within their familiar, informal networks of family, friends, and money lenders, applying their experience to formal financial services is not always as obvious. Financial education can help to overcome this hurdle, providing clients with the tools to make more informed financial choices, and can even increase the uptake and use of microfinance products and services.


Taking Stock offers a global perspective by profiling a wide range of programs, the majority of which target women and young people in African countries. While program content in most cases tended to focus on savings, budgeting, debt management, and bank usage, the programs employed a variety of delivery channels,  such as the mass media campaigns XacBank is now using in Mongolia, to disseminate key messages.


It is too early to draw conclusions on the impact of financial education, but these will come as we build our understanding of what makes for an effective financial education program. Meanwhile, the emerging evidence, as measured by increased savings and improvements in debt repayment rates, suggests that behavior change is happening and that the indicators are moving in the right direction.



Want to meet Monique, learn more about the Taking Stock report, and grab a danish? Come join us for a  financial education breakfast session on November 1, sponsored by The MasterCard Foundation and the Citi Foundation, at the 2011 SEEP Annual Conference. Don't miss out. Register today

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