The Indian School of Microfinance for Women initiated its Financial Literacy programme based on the experience of SEWA Bank, a microfinance bank and one of the promoters of the School. During the last few years, SEWA Bank has been providing in the State of Gujarat , Financial Literacy services to economically active poor women, to enable them to come out of the vicious cycle of poverty and build their own assets and capital.
The School perceived the need and the importance of providing Financial Literacy services to a larger section of the poor population which is served by microfinance sector in India and decided to take forward the Financial Literacy movement to the whole country. With Citi supporting us to establish a special unit within the School, "Citi Centre for Financial Literacy" for spreading Financial Literacy movement in the microfinance sector, our task became easier.
In its first year of operations the Centre's prime activity was sharing the concept of Financial Literacy across different regions of the country. The School organized Financial Literacy workshops and campaigns in 7 States, Gujarat, Maharashtra, Madhya Pradesh, TamilNadu, Andhra Pradesh, Orissa and West Bengal with about 5000 participants from 89 microfinance organizations out of which 4000 were leaders of Self-Help Group. Some of the positive experiences at the end of the campaigns, at various centres during direct interaction with poor women are worth noting. Women took oath making statements like "I shall start saving Rs. 5 everyday", "I shall not borrow money for my daughter's marriage but will save for it", "I shall repay all my past debts by saving regularly", "I will stop consuming tobacco and save Rs. 10 every day" and many more like them.
We found that Financial Literacy movement has made many of the poor financially wise by making them understand: (A) It is useful to think about tomorrow and the long term future. (B) Small, regular and frequent savings will help to build capital. (C) Power of compounding helps to build corpus. (D) Differentiating between avoidable and unavoidable expenses and avoid the avoidable. (E) Differentiating between consumption and investment. (F) Investment strategy is the best strategy. (G) Insurance should be used for risk minimization. (H) Borrowing for consumption is the worst financial strategy. (I) Preparing financial goals and following them religiously. (J) Factors which help to build capital and factors that de-capitalise them.
During the workshops with some of the team members of the participating organizations, to our pleasant surprise we found them in a state of shock when they prepared their own expense statement and realized that they can avoid many avoidable expenses and actually save large sum to fulfill their financial dreams. Talk of dreams coming true...but then, we have a long way to go...
Jayshree Vyas
Chairperson
Citi Center for Financial Literacy
(Unit of The Indian School of Microfinance for Women)
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