Financial Literacy : An Idea whose time has come

Time has come when financial literacy has rightly occupied the centre-stage among the supply side institutions --  banks, insurance institutions, MFIs, policy makers, national governments, financial regulators, civil society organisations, and end users, that is bottom & middle of the pyramid populations. 

Although the concept is defined usually at convenience by stakeholders, but its broad contours remain same, that is the ability to take informed deisions, make choices leading to empowerment. A few in industry view it as a corporate social responsibility, marketing strategy or a compliance requirement. However, this shall not arrest our intellect to the cliched statements and the GOOD part is: there is atleast running thread across different players.

While the concept may still be far from a universally accepted definition unlike financial inclusion, the OECD defines it as 'the process by which financial consumers/investors improve their understanding of financial products, concepts and risks, and through information, instruction and/or objective advice, develop the skills and confidence to become more aware of financial risks and opportunities, to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being'.

There are good intentions & genuine concerns about vast groups of population still unaware of institutional banking concepts and the know-how to make informed decisions. This makes them vulnerable to exclusion from mainstream socio-economic framework.

Measures are being adopted across the world to systematically reduce financial exclusion; Indian policymakers brought a policy change in the way banking services were delivered particularly in rural India. In 2006 the RBI eased up the delivery model and made it possible for banking and financial service providers in India to reach out to end customer through business correspondents.

Business correspondent guidelines encouraged banks & other formal fnancial institutions to engage with entities like FINO which is a pioneer in agent led banking platform designed to propel benefits of financial inclusion to the bottom of the pyramid. FINO has a completely different expression on financial literacy.

In addition to delivery of financial services, FINO realised the gap in the system and came up with its strategically aligned Financial Inclusion Education Academy (FIEA) to bring behavioral changes amongst the target group, which in turn, has enabled people to seek for right products and services.

For FINO, financial literacy is an engine that will aid achieving comprehensive financial inclusion and hence financial freedom. Viewed from this standpoint, FINO has significantly established a positive correlation between financial literacy and the ability to make informed decisions. This is a boon to the inclusive growth agenda.

                                                                                              more in next post..........

P:S : This is the first part of three blogs series on Financial literacy 

- By Shilpi Yadav and Sarthak Luthra.

Invitation

Dear Champions of Financial Inclusion,

Greetings from FINO Fintech Foundation!

We would like to extend an invitation to you / your esteemed organisation to partner with Financial Information Network and Operations – Fintech Foundation(F^3) as one of the champions of financial inclusion (CoFI) and strengthen the coalition of changemakers in financial inclusion space in the Asia.
It would be team FINO's privilege to brief you about F^3 and then about CoFI.F^3 is a section 25 not for profit company which acts as a business correspondent on behalf of banks and other financial institutions and enables financial inclusion to millions of poor, unbanked and under-banked people across nooks and corners of India by employing biometric smart card technology with human face.
Over the past three years team FINO has grown at a blistering pace, touching ten million plus customers nationwide across 182 districts in 21 states in India . Our network of bandhus (agents) throughout the country has grown to the extent that we now process two million transactions a month. F^3 is currently involved in a big way in several nation building projects such as NREGA, SSP and RSBY. Through our involvement we have managed to gain unrivaled penetration into the rural market and have acquired an active customer base in previously underserved urban and rural areas. Our network of associates is backed by sound technology which is based on biometric cards and hand held devices used by the local representatives. This new paradigm in banking, anchored around door step service and biometric validation has helped these customers slowly to transit from savings to other products and services across the spectrum of financial inclusion. What brings us greater joy is the realization that this is only the beginning and needs to be strengthened by a knowledge creation and sharing network of multi stakeholders. This realization has incubated a network called Champions of Financial Inclusion.
Champions of Financial Inclusion (CoFI) is a flexible coalition of multistakeholders from various sections of the civil society ,Business community and state actors to make complete financial inclusion a reality and empower poor to mitigate risks which arise chiefly out of poverty. Considering the expertise of CoFI one possible way which we think we could move together is through knowledge generation and knowledge sharing in order to make decision making easier in public and private domains particularly for organizations engaged for financial inclusion in the developing world.
We propose our interactions through multiple channels
• web based resources like fino-cofi blog, Friends of FINO group on facebook etc ,
• Joint research studies and publications,
• FINO Conferences, Brainstorming sessions etc.
Once again team CoFI extend a warm invitation to you/your organisation and look forward for your suggestions and views to address the mutual challenge of financial exclusion in socio economic space.

- FINO Fintech Foundation,India.

http://www.fino.co.in/

Please feel free to contact Mr. Jatinder Handoo regarding any related piece of information at
+91-9769-012016
(022)4161-3466
E- Mail :finocofi@gmail.com