A Scoping Study of Financial Literacy Training Programmes...
Transcript of A Scoping Study of Financial Literacy Training Programmes...
2012
Deeptha Umapathy, Parul Agarwal,
Santadarshan Sadhu
Centre for Micro Finance
7/26/2012
A Scoping Study of Financial Literacy Training Programmes in India
About the Centre for Micro Finance
The Centre for Micro Finance (CMF) is a non-profit, non-partisan research centre housed within the Institute
for Financial Management and Research in Chennai. The mission of the Centre for Micro Finance is to
improve the accessibility and quality of financial services for the poor through rigorous research, knowledge
dissemination and evidence-based policy outreach.
About Bankers Institute of Rural Development (BIRD)
Bankers Institute of Rural Development (BIRD), Lucknow is a premier institute for providing training,
research and consultancy services in the field of agriculture and rural development banking in India. The
Institute was established in 1983 by National Bank for Agriculture and Rural Development (NABARD).
Acknowledgement
The authors thank the Bankers’ Institute of Rural Development (BIRD), whose generous assistance
and continuous support made this survey and report possible. We express our gratitude to all the
participating institutions for sharing their financial literacy training modules and accommodating our
study in their operation areas; without whose valuable participation it would not have been possible
to fulfill the objectives of the project. We sincerely thank our dedicated surveyors and support team
for their valuable contribution in conducting the survey work. We thank the representatives of all the
organizations- Mr. Amulya Mohanty (Access Development Services), Ms. Elaine Ghosh & Ms.
Mallika Ghosh (Parinaam Foundation), Ms. Preeti Telang (Swadhaar FinAccess), Ms. S. Rama
Lakshmi (APMAS), Mr. Abhishek Patro (eCubeH Research Labs), Mr. Alay Barah (Reach India),
Mr. Shubhankar Jha (ISMW), Mr. N. Rama Krishna (Trident Microfin Private Ltd.), Mr. Sachin
Hirani (Accion International), Vanya Sinha (SEWA Bharat), Ms. Pallavi Panchal (SEWA Bank), Mr.
George Thomas & Mr. Sibu Abraham (ESAF), Simanchala Sahu (College of Agricultural Banking),
Ms. Tamali Kundu (Pradan), Mr. Anand Ayyagari (SKS), Mr. Avik Kedia & Ms. Chidambara Sagar
(Sanchayan Society), Nikita Deshpande (Suryoday MicroFinance), Vivek Kaushik (Partners in
Prosperity) and Jatinder Handoo (FINO) for their cooperation to the study. We look forward to their
kind support in Centre’s future endeavors too.
In addition, we extend our appreciation to CMF interns Tanya and Gedeon Lim for their contribution
to the project. We thank Ajay Tannirkulam and rest of the Centre team members for their guidance
and feedback.
Contents About the Centre for Micro Finance ......................................................................................................... 4
About Bankers Institute of Rural Development (BIRD) ............................................................................. 4
Acknowledgement .................................................................................................................................... 4
Executive Summary ....................................................................................................................................... 7
Chapter 1: Introduction ................................................................................................................................ 8
Chapter 2: Objectives of the study ............................................................................................................. 12
Chapter 3: Methodology ............................................................................................................................. 13
Content Analysis of Modules .............................................................................................................. 13
Management Interviews ..................................................................................................................... 14
Client surveys ...................................................................................................................................... 14
Web survey ......................................................................................................................................... 15
Sampling .................................................................................................................................................. 15
Participants ............................................................................................................................................. 16
Challenges ............................................................................................................................................... 17
Limitations of the study .......................................................................................................................... 17
Chapter 4: Characteristics of Financial Literacy Training Modules ............................................................. 18
Development of module ......................................................................................................................... 18
Macro-Topics .......................................................................................................................................... 18
Sub topics ................................................................................................................................................ 22
Savings ................................................................................................................................................ 22
Borrowing ............................................................................................................................................ 23
Insurance ............................................................................................................................................. 23
Pensions .............................................................................................................................................. 24
Budgeting and planning ...................................................................................................................... 24
Numeracy ............................................................................................................................................ 25
Investments ......................................................................................................................................... 25
Interest rates ....................................................................................................................................... 26
Others Topics ...................................................................................................................................... 26
Methods used ......................................................................................................................................... 27
Chapter 5: Characteristics of FLT (number of sessions, length, TOT) ......................................................... 29
Profile of Trainers ................................................................................................................................ 30
Constrained Modules .......................................................................................................................... 30
Chapter 6: Management views and perception on FLT .............................................................................. 31
Chapter 7: Client survey analysis ................................................................................................................ 33
Client Survey: Basic Findings ................................................................................................................... 34
Client Survey: Youth ................................................................................................................................ 40
Chapter 8: Government Initiatives ............................................................................................................. 44
Financial Literacy and Credit Counselling Centres .................................................................................. 44
Reaching out to FLCCs: ........................................................................................................................ 44
Comparing ‘To be Achieved’ with ‘The Achieved’: ............................................................................. 44
College of Agricultural Banking: Financial Literacy (FL) Workshop & Training ....................................... 46
Background ......................................................................................................................................... 46
Objective ............................................................................................................................................. 46
Content ............................................................................................................................................... 46
Tailored programs for children and students ..................................................................................... 48
Challenges faced by CAB ..................................................................................................................... 48
Chapter 9: Conclusions/recommendations/future research ...................................................................... 49
Chapter 10: Appendix ................................................................................................................................. 51
A1. Participating organizations list/ Content Analysis Grid .................................................................... 51
A2. Questionnaire for Management ....................................................................................................... 53
A3. Questionnaire for Client Survey ....................................................................................................... 54
A4. Tables of Findings for all institutions from Client Survey ................................................................. 67
A5. Questionnaire for Youth Survey ....................................................................................................... 69
A6. Category wise Tables of findings from Youth Survey ....................................................................... 83
A7. Measuring Financial Literacy: A Pan India Sample Survey ............................................................... 85
Sample ................................................................................................................................................. 85
Executive Summary
Managing Finances efficiently is a skill that only a few people are able to cultivate and practice.
Ingredients those are instrumental to developing this essential dexterity include financial knowledge,
financial awareness and financial aptitude. The first two of these three can be fed in through
information sharing, education and awareness generation campaigns but the third one develops over
time and requires assistance from an expert. The package of all these ingredients being provided
through the required mechanisms can be called a Financial Literacy Training. The role of Financial
Literacy in improving the ability of people (especially low income people) to manage their cash flows and
to make judicious financial choices has been widely acknowledged and in wake of this, various financial
literacy training programmes are being designed and implemented across the country.
This study aims at understanding the scope of different financial literacy training programmes, that are
being implemented across India, from both an implementer’s and beneficiaries’ perspective. For the
purpose of the same, discussions were held with all the stakeholders (module developing agencies,
implementing organizations, representatives of government initiatives and beneficiaries) in the form of
structured and unstructured interviews. Specific modules were also collected and analysed for their
content and methodology.
Most of the participating organizations seem to follow a demand-driven approach and report to be
developing and modifying modules as per the feedback from the community. But some of them are still
very specific in the kind of topics they cover in their training; this applies especially to MFIs that focus
mostly on imparting education on loan products. From different training modules, study derives that
‘savings’ and ‘borrowing’ are the most popular topics and other important topics like ‘insurance’,
‘pensions’ and ‘investments’ are not paid much attention to. Planning and Budgeting is another
common theme but it lacks the extensive follow up with the trainees that is required with such a hard
learned activity. On the methodology front, innovative ways are being devised and most of the
initiatives are proving successful. But concern is the lack of idea and experience sharing among
organizations due to which most of the innovative methods are left being used only with some isolated
samples of target community.
From interviews with beneficiaries, a gap between their perceived financial capability and actual
financial ability has been observed. Also, apart from numeracy, beneficiaries scored low in all other
subjects especially in those of money management and knowledge of formal financial products.
Government has also instituted some initiatives in this regard but has not been able to successfully
reach out to the numbers targeted. This is where it needs to communicate the idea and its objective
clearly to those who are being accorded the responsibility (like FLCC Centres) of imparting financial
literacy. College of Agricultural Banking is working towards creating a promising platform that can be
used as a hub of information with all the developing and implementing agencies sharing their modules,
ideas, innovations and experiences. Majority of institutions welcome this resource but are yet to
contribute their bit towards it.
Chapter 1: Introduction
Financial Education has gained a prominent role in economic development policies because of the
strong associations that have been confirmed by researchers between households’ financial literacy
levels and participation in financial markets. Courchane and Zorn (2005) provide evidence that a causal
connection runs from financial knowledge to financial behavior to credit outcomes.1 Compelling
evidence from various researches conducted in developed and developing countries echo that
households’ with low financial literacy levels are also households that tend not to plan for retirement,
borrow at higher interest rates, acquire fewer assets and participate to a lower extent in formal financial
markets. (Lusardi and Muira, Cole & Zia)2 With the end goal of ensuring universal access to formal
financial markets and increasing the number of people who use formal financial services, building
financial capability is being considered an important solution for increasing access of financially excluded
populations around the world.
There are two parts to the challenge of including people in the formal financial environment – providing
access and ensuring usage. While access to formal financial service providers is a continuing challenge in
many countries, innovative efforts such as mobile money, biometric KYC norms and agent based service
providers are breaking some of the demand side barriers customers face while addressing supply side
constraints for formal financial service providers as well. Unfortunately, usage of products offered to the
newly included populations continues to remain low in general, barring a few exceptions like M-PESA in
Kenya. For example, the high level of dormancy in No Frills Account (NFA) around India is an indication
that demand side constraints remain unaddressed.
Demand side constraints with respect to access to and usage of formal financial services are as
heterogeneous and multi-dimensional as the population of low income households in India. The table
below summarizes the different constraints faced by a potential customer.
Constraints Examples
Physical/Geographical Bank branches are too far
Temporal Transactions take too long
Quality Products are rigid and badly designed
Knowledge Do not have information about various products or
documentation seems complex
Psychological Fear of mistreatment from Bank officials
Table 1: Constraints of a customer of financial services
The role of financial education or financial literacy can be seen as building financial capability of people
to understand the services and products that are being offered to them, understand how to use them to
1 Courchane, Marsha, and Peter Zorn. 2005. “Consumer Literacy and Creditworthiness.”
2 Lusardi, Annamaria, and Olivia S. Mitchell, 2007, Baby Boomer Retirement Security: TheRoles of Planning, Financial Literacy,
and Housing Wealth, Journal of Monetary Economics 54, 205-224.
serve their needs optimally and know where to go for assistance. Lusardi and Mitchell (2007), show that
households with higher levels of financial literacy are more likely to plan for retirement and those
planners arrive at retirement with substantially more assets than non-planners.3 Mandell (2007) also
links higher levels of financial literacy to more responsible financial behavior, such as writing fewer
bounced checks, and paying lower interest rates on mortgages.4 Collins (2010) summarises a
randomized field study that focused on evaluating a highly targeted mandatory financial education
curriculum for very low-income clients in a housing voucher program. The study showed that financial
literacy education is related to improved financial behaviour. The results were a significant increase in
savings account balance, a modest decrease in the percentage of clients with poor credit ratings and
improvements in self-reported understanding of financial issues by clients.5
However, financial literacy could mean different content for different people. While stocks and mutual
funds will be interesting for young middle class salaried individuals, who already have access to savings
accounts in banks and possibly own a credit card or two, for a rural shop owner, it could mean learning
to access more rudimentary financial tools.
It is becoming apparent that participating in the formal financial environment can be an extremely
technical and overwhelming experience. When countries were in the nascent stages of globalization, the
government used to offer a small range of options to its people and responsibility for their financial
welfare remained with the government and public sector financial institutions. But this has changed
over the years and the onus for planning for the future and managing one’s financial health has been
transferred to every individual with some help from their employers (who could be private or
government organizations). This requires informed and continued participation in the formal financial
markets. Additionally, the financial environment is now populated by a huge range of complex and
nuanced products that are designed to help people save, invest, plan long term expenses, acquire
assets, access credit, insure against various risks etc.
In an increasingly complex financial environment, literate and working populations tend to feel
overwhelmed by the range of options and minute differences in technical jargon that could make or
break important financial investments. When we place an already vulnerable section such as the rural or
urban poor, who are financially excluded from formal financial services most of the time, have negligible
levels of education and no formal finance or economics training, the problem multiples exponentially.
With no social protection or financial safety nets they are more exposed to whims and vagaries of life.
But building financial capability of people at all socio economic levels has become essential to ensure a
stable and well-functioning global financial environment. With the recent global financial crisis
3 Lusardi, Annamaria, and Olivia S. Mitchell, 2007a. Financial Literacy and Retirement Preparedness: Evidence and Implications
for Financial Education.î Business Economics, 42(1): 35-44. 4 Mandell, Lewis, 2007, Financial Education in High School, in Annamaria Lusardi ed.: “Overcoming the Saving Slump: How to
Increase the Effectiveness of Financial Education and Saving Programs” (SUNY-Buffalo Press).
5 Collins, J. Michael. “Effects of Mandatory Financial Education on low-income clients”October 2010.
stemming from the developed nations and growing number of delinquencies in microfinance sectors in
some developing countries, this has point has been driven home repeatedly.6
Governments, private organizations, financial institutions and international organizations have been
focusing a lot of funds toward improving people’s levels of financial literacy. While researchers are still
unsure about the dynamics of how higher financial literacy levels affect financial market participation,
financial literacy programs are being offered to a wide range of people around the world. School
children, new recruits, rural women, small farmers etc. have all been provided some form of financial
literacy training with an expected outcome of higher participation in the formal financial system.
Unfortunately, behavioral impacts of some of these programs have been insignificant, despite high
impact on knowledge indicators regarding financial products and services. Cole, Sampson and Zia (2011)
take evidence from surveys in India and Indonesia, and a field experiment to test theories of low
demand for financial services in emerging markets. The survey results found a strong correlation
between financial literacy and financial behaviour. This indicated that financial literacy is paramount,
and that educated consumers will make better financial decisions. However, the results of the field
experiment showed that education program had a modest effect as it simulated demand for bank
accounts only from those with low levels of education or financial literacy. In contrast, a second
intervention in the form of small subsidies increased demand significantly, indicating that a financial
education program is not an effective tool for promoting usage of bank accounts.7
This insignificant impact could be explained by the number of unanswered questions that exist in this
new but growing area of research and implementation. Due to the heterogeneity of the population’s
educational background, cognitive capabilities, access to financial products (formal, semi-formal and
informal) and financial needs and aspirations, developing content and methods of training can be a
complex and highly specialized task. While school students’ might respond positively pedantic and
complex issues relating to equity and debt due to their background in economics or commerce, rural
farmers might be more interested in knowing where the nearest source of credit is. While men might be
interested in business or farm related financing, women might be interested in household budgeting
and planning for their children’s health or education needs. While people in South India do not worry
about protecting their homes against flooding or such natural disasters, people in island countries might
be looking for such solutions. For instance, a study by Lusardi (2005) examines the effect of retirement
seminars in simulating savings across older households and races. The study focused on African-
American and Hispanic races finds a large heterogeneity in the financial and savings behavior African-
Americans and Hispanics, and Whites. Estimates of the study show that seminars have some effect on
savings, particularly, to those at the bottom of wealth distribution, and to those with low education.
Findings thus suggest that education programs offered by the Government or employers should focus
6 “The Case for financial literacy in Developing Countries: Promoting Access to Finance by Empowering Consumers.” OECD, The
World Bank, DFID, CGAP 7 Cole, Shawn A., Thomas Sampson, and Bilal Zia. "Prices or Knowledge? What Drives Demand for Financial Services in Emerging
Markets?" Journal of Finance 66, no. 6 (December 2011): 1933-1967.
on basic financial planning strategies and in the case of minorities, be more targeted and tailored to
their specific needs. 8
In this complex multidimensional environment, some of the questions that remain unanswered are:
1. What content is relevant to the target population?
2. What are the dynamics of information leading to behavioral change and action?
3. What is the purview of financial education in financial inclusion?
4. Do short term financial training work better for some populations in comparison to other?
5. Is the design of training programs (length, method of teaching, use of games or other interactive
media) dependent on target population demographics or complexity of topics?
6. What levels of financial literacy are required to be considered financially capable?
The list can be endless even when the population if narrowed down to India’s rural and urban poor. But,
aside from the supply side perspectives in designing these programs, to effectively answer many of the
questions surrounding the role of FE in facilitating financial access and participation, one needs to
understand the demand side constraints faced by low income households. While there is strong
empirical evidence supporting supply side interventions for improving financial access (by governments
and financial institutions), these programs were designed with the assumption that there were no
demand side constraints. For example, the offer of ‘No-Frill Accounts’ with lower KYC documentation
and zero balance requirements, assumed that take-up and usage of this product would be high, but
empirical evidence pointed to the contrary, indicating the presence of demand side constraints.
The same can be said for designing financial literacy programs. There are supply and demand
side perspectives that need to be balanced to achieve the required outcomes. This study attempts to
document the current trends in India with regard to financial education (FE)/financial literacy training
(FLT) for low income households in urban and rural areas. The study tries to include different financial
institutions like societies, NGOs, NBFCs, banks, MFIs and capacity building organizations in order to
understand the different models being adopted and also capture the differences in outcomes between
these programs. By using a combination of research techniques and data collection being conducted at
multiple levels, the study attempts to capture the supply and demand side perspective of these
programs.
Some of the questions this study will be answering are:
1. What kinds of programs are being offered to the low income clients in urban and rural India?
2. Who are offering these programs?
3. Are these programs accomplishing their envisioned goals?
8 Lusardi, A."Financial Education and the Saving Behavior of African-American and Hispanic Households,"Working paper,
Dartmouth College (2005).
Chapter 2: Objectives of the study
There has been a sudden surge in interest on topics related to consumer protection and financial
literacy of the poor in India and across the world. The rise of microfinance in the India and its
subsequent fall during the Andhra Pradesh crisis has played an important role for this debate and
dialogue. While a large majority of financial institutions and regulators unanimously agree on the
importance of financial literacy training, very little is spoken of about how to define and measure
financial literacy and therefore what financial literacy training should entail.
This study is designed to scope out the various modules that are being used in the Indian microfinance
sector and outside for imparting financial literacy education, and also engage in dialogue with financial
literacy training organizations of various legal forms to understand how they view this topic and how
they provide financial literacy training (FLT). The study also intends to identify the attributes of the
training programmes that are well received by the beneficiaries and the ones that need a modified
methodology or approach.
Chapter 3: Methodology
The study has been designed with different levels of data collection and analysis due to the complexity
of the topic. To fulfill the primary objective, contents of various financial literacy modules that are
currently offered to the beneficiaries were analyzed to understand the basic topics, methods and other
elements that are being used. Management interviews were conducted with the person/ team in charge
of development and implementation of FLT to get a deeper understanding of how these modules were
developed and get the organizational perspective on financial literacy training.
A short survey of beneficiaries of FLT was conducted at the client level for select organizations to
understand the levels of financial capabilities, behavior and numeracy and financial product awareness
among FLT beneficiaries. Finally, a short web survey was also conducted to get a sense of how many
MFIs in India self-report that they conduct financial literacy training and what kinds of topics they cover.
Content Analysis of Modules
To assess the FLT that are currently available and offered to the beneficiaries across India, we studied
FLT modules of 20 organizations. Modules were analyzed using a framework (Refer to Appendix A1)
that provided a score of 1 for the presence of a topic. After analyzing all the modules of the sample, nine
macro topics were identified. These topics also combined to provide any recipient a holistic picture of
financial planning. For each of these macro topics, modules were further scored for specialized topics
such as loan repayment strategies under borrowing or credit bureau. Below is a table that provides
details on the macro topics and their sub-topics as well.
Modules were also scored on the number of the games and stories that were used. Use of visual aids
such as movies, flip charts, posters and other interactive activities such as role playing, group discussions
etc. were also scored. Techniques such as session recaps, providing handouts or gifts were also noted.
The latter aspects were not scored as there is conflicting views on whether these are effective methods
to encourage participation or retain participants.
To summarize, in this content analysis section, modules were scored for based on how many different
macro topics were covered, how many sub –topic were covered under each macro topic, number of
games and stories that were incorporated in the module, other interactive methods and visual aids that
might have increased the interest level among participants.
Sample Questions posed in the interview:-
1. How the trainers selected / what is their qualification?
2. How do you think your training programme has benefitted the participants?
3. Was the impact of training any different than what you had expected before implementing it? How?
4. From your experience of planning and implementing the training programme, what do you think is the best approach towards imparting Financial Literacy?
5. Are you planning to reach other areas with the same concept and module?
6. What kind of changes would you like to introduce in your present approach and module? Why?
Management Interviews
Management interviews were scheduled with
the most knowledgeable person/team in the
organization that would be able to provide
information about the genesis of FLT in their
organization, its evolution from beginning to
end, the organization’s view about their module
and about FLT in general etc. (Refer to Appendix
A2 for the questionnaire). These interviews
were used to capture any changes that might
have been made by the organization if they
were using standard module developed by a
capacity building organization. In case of them
using a self-developed module, the
management interview captures aspects of their
FLT that cannot be discerned from reading their
module (Refer to Chapter 6 for details).
Client surveys
A sample of beneficiaries associated with selected institutions was interviewed to understand their
perspective on the financial literacy training programme. Apart from the regular beneficiaries, surveys
were also conducted with youth who were trained by one of the participating institutions (Refer to
appendix A3 for questionnaire administered with regular beneficiaries and refer to appendix A5 for
questionnaire administered with Youth). Because youth are the new ones to enter the financial
environment where they are required to make their own financial decisions using their hard earned
income, it is important to teach them the best financial practices so that they do not face the problems
that their older generations are facing now. The idea is to address the ill-informed financial decision
making at the very beginning of an individual’s earning cycle.
Twenty beneficiary surveys were conducted for each of five organizations9 and forty were conducted for
the youth survey, in total covering seven states across India, spanning rural and urban populations. The
surveys were designed to capture information on the beneficiary’s current levels of awareness about
financial products, perceptions about certain financial behaviors, basic numeracy levels and also
information on their perception of their levels of knowledge in various aspects of financial management
before and after receiving the financial literacy module. This allows us to gauge if the beneficiaries were
9 Access Development Services, Parinaam Foundation, APMAS, Swadhaar FinAccess and Samhita/ eCubeH
Research Labs
already financially literate if their after scores were high, in addition to being able to observe if their
perceptions of their levels of financial management knowledge match with actual information they
provide us. The before and after score also allows us to analyze which modules were successful in
increasing knowledge levels and which modules were able to affect behavioral change as well. (Refer to
Chapter 7 for details).
Table 2: Examples of questions in Client Survey
Female Beneficiaries Youth
What were the methods and tools used during the training programme?
What did you like the most in training programme/ What didn’t you like at all?
How comfortable were you about subjects (Savings, Borrowing, Numeracy, Money Management
etc.) before and after the training programme?
Suppose you have Rs. 2000 to save. You can
either save this in an account which earns 4%
interest or repay an already existing loan of Rs.
2000 that charges 20 % interest. What will you
choose to do with the 2000 rupees that you
have got?
Kapil is a furniture salesperson at a large
furniture store. He receives a monthly base
salary of Rs. 20,000 plus a ten-percent
commission on his sales. Last week there was a
sale at the store. Kapil’s sales for the weekend
brought his monthly total to Rs. 50,000. Kapil
wants to estimate his pay for the month. What
is the estimate?
Vimla is a daily wage labourer with irregular
income. She wants to save money weekly and
draw whenever needed. What type of savings
account would you suggest her to open?
Imagine that the interest rate on your savings
account was 1 percent per year and inflation
was 2 percent per year. After one year, would
you be able to buy more than, exactly the
same as, or less than today with the money in
this account?
Web survey
The web survey was initially designed to increase the coverage of the number of organizations the study
was able to include in the sample. But the low response rate for the web survey limited its usage
significantly. It was designed to gauge organization’s perception of what they considered financial
literacy was and what topics they provided as training for their clients if they reported to be providing
FLT. The web survey also collected information on what kind of a module was being used to understand
the extent standardized modules were being used.
Sampling Organizations for management interviews were shortlisted after some expert interviews and a scoping
exercise to understand how many unique financial literacy modules are being used. Attention was paid
to ensure that different states in India were covered and as many of the legal forms of organizations in
the development sector were included in the study. Phone interviews were conducted to elicit more
information on the organization’s FLT and also their willingness to participate in the study. Their
modules were collected and management interviews were conducted in person or over the phone.
For client surveys, as much of a rigorous and random selection of sample was ensured. For e.g., a region
was randomly selected from all the areas FLT was provided, and consequently a smaller unit of
geography was randomly selected and finally after the organization provided the complete list of
individuals who were provided FLT in the smaller geographic unit, 20 beneficiaries from the list were
randomly selected and interviewed.
A list of MFIs who were registered on the MIX market database was compiled and an email invitation to
take part in the web survey was sent to every organization that had a working email address. 46
organizations were contacted over phone and email to solicit their participation in the survey and 18
responses were received over the stipulated 3 weeks that was provided to complete the survey.
Participants A total of 18 organizations made their modules available for content analysis and management
interviews were conducted for all of these organizations. Client surveys were conducted for 6 of these
organizations across 7 states, covering urban and rural populations.
Table 3: Participant details
While the study was not able to cover beneficiaries of every organization whose module is
analyzed in the study, the methodology has tried to include urban and rural beneficiaries in addition to
SHG, JLG and individual clients. In addition, a survey was conducted with urban youth from private and
government schools to shed light into the usefulness of providing FLT to youth. The table below provides
details of how many organizations were contacted initially and how many were finally included in the
study. For this study the organizations were categorized as:
NBFC/MFI – Non banking financial corporation/ Microfinance Institution
SHPI – Self help group promoting organizations
Cooperative Banks (Coop.)
Classification Contacted Responded ModulesManagement
Interviews
Client
Interviews
NBFC/ MFI 4 5 4 0
SHPI 1 1 1 1
Cooperative Banks 3 3 2 0
DO-MFI 3 3 5 2
DO-F 1 1 1 1
DO-P 2 2 2 1
CBO 5 5 3 1
Total 69 19 20 18 6
69
Development organizations affiliated with an NBFC/MFI (DO-MFI)
Development organizations specializing in providing Financial services (DO-F)
Development organizations covering multiple aspects of poverty (DO-P)
Capacity building organizations (CBO)
Challenges While conducting this study we faced several challenges that are worth mentioning:
a. Getting access to modules as there were issues with the copyright
b. Language of modules
c. Time availability among organizations
d. Conducting client interviews in different languages
Limitations of the study Due to time and funding constraints, the FLT programs were not evaluated by one very important factor
– the process of implementation. The quality of the trainers, where the training takes place, how
consistently the training occur, what time of the day they happen, how interactive are these sessions
etc. all important determinants to the effectiveness of the training program.
Another limitation is that several important organizations like SEWA, Chaitanya and few more were not
included. SEWA’s module was one of the first FLT programs to be implemented in India and it does pose
as a severe limitation in our study at not being able to conduct client interviews with their recipients.
The management interviews unfortunately were never conducted with the person who was in-charge of
the development of the module. Especially with larger and older organizations, the research team was
able to speak with someone who is currently in-charge of implementation and not the person who
spearheaded the development of the module.
Chapter 4: Characteristics of Financial Literacy Training Modules
Development of module Four of the eighteen organizations that were included in the sample were capacity building
organizations that developed different training modules for other organizations. They were Accion
International, Indian School of Microfinance for Women (ISMW), Reach India and Access Development
Services. Two of the organizations in the sample (not including Accion itself) used Accion International’s
FLT module and three used ISMW’s FLT module while the remaining eleven organizations used modules
that their organization developed to suit their needs uniquely.
In the web survey, eighteen organizations responded to the
invitation to participate and completed the web survey. Twelve
reported themselves to be NBFCs and six were NGOs. While all the
NBFCs reported that they developed their own modules, two of the
NGOs used ISMW and Freedom From Hunger modules each while
the remaining four reported that they developed their own module.
The data collected in the study indicates that a majority of financial
literacy trainings provided around India are designed by individual
organizations and therefore would vary in topics, methods and impacts enormously. Without a central
repository of these modules and knowledge sharing about organizations’ FLT experiences, there is
concern that significant time and financial resources are lost in re-inventing the wheel when it comes to
best practices, topics, methods and pitfalls of FLT.
Macro-Topics The content of a training program plays an important role in being effective. Before analyzing the
content of the modules, it is important to understand what the end goal of financial literacy trainings
need to be.
From extensive literature reviews on the subject, it can be concluded that financial literacy training or
financial education should enable people into making better financial decisions, increase their levels of
familiarity with products and tools around and also know where to go for information or advice on
sophisticated aspects of financial management. Specific topics or content guidelines change across
countries, across urban and rural regions, across different target populations and also are contingent
upon who develops the literacy module. But, if financial literacy training’s end goal were to equip its
beneficiaries with information on all aspects of financial management that is needed throughout a
lifetime, the following topics would need to make an appearance in FLTs in varying levels of detail:
Savings
Borrowing
Formal Banking products
Budgeting and financial planning
Legal Status NumberModules
Used
NBFC 12
Self
Developed
NGO 4
Self
Developed
NGO 1 ISMW
NGO 1
Freedom
From Hunger
Web Survey
Insurance
Pensions
Interest rates
Investments
Numeracy
In order to understand some of the important characteristics of financial products (formal or informal)
such as interest rates and payout amounts, a basic level of numeracy is required as well. A study
conducted by CMF in India did ascertain that without addressing numeracy issues in the participants,
complex notions such as ‘evaluating financial trade-offs’ cannot be taught effectively10. Study found that
Financial Education is effective in increasing awareness of financial products and services. It can also
positively impact individuals’ attitudes towards the purchasing and recommendation of formal financial
services and planning tools but a change in financial behavior requires good numeracy skills.
A total of ten macro topics (including the list of nine topics identified from the literature survey
and another category that would represent anything not noted in list of nine topics) were used to build
the content analysis framework for this study as shown in the following sub-sections.
Table 4: Macro topics and the respective organization distribution
No
.
Topic
Number of FLT modules with topic by organization type11
Total MFI CBO Coop DO-MFI DO-P DO-F SHPI
1 Savings 15 2 4 3 3 1 1 1
2 Borrowing 17 4 3 3 3 2 1 1
3 Banking products 9 1 1 3 2 1 1 0
4 Insurance 7 1 2 2 0 1 1 0
5 Pensions 5 1 1 2 0 1 0 0
6 Budgeting and
Planning
13 2 3 3 3 1 1 0
7 Interest rates 10 2 2 2 1 1 1 1
8 Investments 6 1 2 2 0 0 1 0
9 Numeracy 2 0 0 0 2 0 0 0
10 Other12 7 1 1 2 2 0 1 0
The disaggregation of coverage of an FLT topic by the type of organizations was done in this manner in
order to understand if objectives of an organization would play a role in determining the topics of FLT
10
Unpacking the Causal Chain of Financial Literacy (Carpena et.al); Sept. 2011 11
MFI: Micro Finance Institutions, CBO: Capacity Building Organizations, Coop: Cooperatives, DO-MFI: Development Organizations affiliated by an MFI, DO-P: Development Organization covering multiple aspects of Poverty, DO-F: Development Organization specializing in providing financial services, SHPI: Self Help Group Promoting Institution 12
Currency Recognition, Documentation, Information on Credit Cards, PAN Card etc.
program. The intent to train the beneficiaries in particular topics could be an indicator of what the
organization thinks the beneficiaries lack, or what they feel will be most beneficial to their relationship
with their client.
An immediate observation from Table 4 is that even basic topics such as savings and borrowing do not
appear in many of the FLT modules offered by various types of organizations. The topics that appear
most often in FLT modules in the sample are Borrowing, Savings, Budgeting and planning and Interest
rates of some kind (Simple/compound, flat/reducing, fixed/floating) in that order of decreasing
frequency. The second observation is that the FLT module of sampled SHPIs covers the least number of
macro level topics. MFIs, CBOs and Cooperative banks share almost the same distribution on topics
covered because some of the MFIs and Cooperative banks adopted the CBO modules for their
beneficiaries. But it is worth noting that in all three of these modules, numeracy has not been addressed
in any form. In the entire sample, numeracy related training is provided only by two of the three
development organizations associates with MFIs.
In order to analyze how self-developed modules differed from the various CBO modules, the CBO
modules were analyzed separately with self-developed modules categorized by various organizations
and Table 5 provides this information:
Table 5: Number of FLT modules with topic
No.
Topic
Number of FLT modules with topic
CBO
1
MFI CBO
2
Coop DO-
MFI
DO-P DO
-F
CBO
3
CBO
4
SHPI
1 Savings 1 0 1 1 1+1 1+0 1 1 1 1
2 Borrowing 1 1+1 1 1 1+1 1+1 1 0 1 1
3 Banking
products
1 0 0 1 1+1 1+0 1 0 0 0
4 Insurance 1 0 0 0 0+0 0+0 1 0 1 0
5 Pensions 1 0 0 0 0+0 0+0 1 0 0 0
6 Budgeting and
Planning
1 0 1 1 1+1 1+0 1 0 1 0
7 Interest rates 1 0+1 0 0 0+1 1+0 1 0 1 1
8 Investments 1 0 0 0 0+0 0+0 0 0 1 0
9 Numeracy 0 0 0 0 1+1 1+0 0 0 0 0
10 Other 1 0 0 0 1+1 1+0 0 0 0 0
When the four CBO modules are analyzed separately, it was interesting to note that only one of them
scored 9/10 topics, while one covered only savings another provided only savings, borrowing and
budgeting. The assumption that capacity building organizations might have a more holistic view of what
needs to be included in FLT modules does not hold true in our sample.
Key Findings 1. Almost all the organizations cover the topics of savings and borrowing (specially the importance of
repayment).
2. Interest rates are also discussed by many of the participating organizations but not in great detail.
3. Budgeting and Planning is also a widely discussed topic but the follow-up on actual practice is
significantly low.
4. Topics like Pensions, Insurance and Numeracy are unfortunately not very popular.
5. Some interesting topics like: identifying fake currency and interesting methods like teaching numeracy
using bindis, sticks, leaves etc., are successfully covered and used by some institutions.
It was interesting to note that one of the development organizations that provide overall poverty
alleviation assistance to rural households (DO-P) provides only information on borrowing in their FLT
module. MFIs that do not use an existing CBO’s module cover only 1-2 topics, these topics are directly
related to their product – borrowing and interest rates. The SHPI as well provides only information that
is pertinent to the products they promote – savings, borrowing and interest rates. From all the above
observations, one can see that very few of the organizations are currently providing modules that are
not directly linked to the products and missions of the providers and thus, one/ few aspect of financial
management, that are generally aligned to an organizations’ products and missions do get labeled as
financial literacy training. Perceptions of organizations regarding financial literacy training is an
important road block in ensuring an effective program reaches the audience.
In the web survey, a question asking if the organization offers financial literacy training has the following
answer options:
- Yes, we provide information on all aspects of financial management (savings, debt, budgeting etc)
- Yes, but only information related to products (loans, over indebtedness etc.) - No, we provide only product related information
While three of the twelve NBFCs who responded in survey chose the first option, seven chose the
second option and only one chose the third. All six NGOs who responded chose the first option. While
the second and third options have the same result for the organization’s clients – they receive
information about the loans products, the perception of the organization is captured in the response
choice. Seven of the NBFCs that chose the second option think that they provide some form of financial
literacy training while they provide information on loans while the one NBFC that chose the third option
did not consider providing information on their loan product a form of financial literacy training.
Of the thirteen organizations in Table 5, five of the thirteen organizations (both the MFIs, SHPI, one of
the DO-P and one CBO) do not provide information on Budgeting and planning. Budgeting and planning
is the only topic that is not directly tied to any financial product and their presence or absence in a
module could determine whether the beneficiaries were given primarily product specific information or
were provided strategies to handle their money better. In our sample, of the twelve NBFCs that
responded to the web survey, only one mentioned cash flow management is a topic included in their
FLT.
Savings Example Parinaam Foundation gives savings boxes to
their participants to help their children
inculcate the habit of saving
Saving Posters are used by Swadhaar
FinAccess to suggest the participants ways of
saving small sums of money regularly (by
practicing the following):
1. Avoid packaged food or food cooked
outside as the time and money
required to make snacks at home is
lesser.
2. Store groceries properly to reduce
the chances of them getting spoiled
and re-bought.
3. Cover cooking vessels
Keep all cooking ingredients as well as
matchbox/lighter ready before turning the gas on.
Key Findings 1. ‘Savings Goals’ and ‘Savings Discipline’ are more popular topics than ‘Comparison of Savings Channels’.
2. Few organizations discuss about the role of credit bureaus and important topic like ‘Repayment
Strategy’; ‘Importance of Repayment’ is a popular topic though.
3. Institutions that include ‘insurance’ in their training modules talk more about its types and basics and
only 1 of them discusses the points to remember while buying an insurance product.
4. Budgeting and Planning covers topics like ‘type of expenses’, ‘making a financial plan’ and
‘distinguishing between needs and wants’.
5. ‘Investment’ when covered, is not discussed in detail..
Sub topics This sub section discusses the types of topics that are discussed by all the participating organizations and
the details in which they cover them.
Savings In the entire sample, only three organizations do not
provide any information on savings – the two MFIs
that do not use an existing CBO’s FLT module and
one of the DO-P organizations. While some modules
make a passing mention of the importance of
savings, and the ability of everyone to save, some
FLTs stand apart from others by using creative
methods to instill ideas and providing suggestions to
help the audience save. Fourteen of the fifteen
organizations that provide information on savings,
also provide information on savings goals which can
be long term, short term or medium term goals.
Some FLT modules even go as far as breaking these
goals down to easy to achieve daily amounts of
money. Thirteen of the fifteen organizations talk
about the importance of discipline while saving. The
ant and the grasshopper story seem to be the
unanimous choice of story to exemplify this principle
of saving little amounts everyday and starting as early as possible. Only ten of the fifteen organizations
compare the various savings channels, discuss each channel’s benefits and pitfalls with the audience.
Topics NBFC/MFI CBO Coop DO-MFI DO-P DO-F SHPI For All
Savings 2 4 3 3 1 1 1 15
Different savings goals 2 4 3 3 1 0 1 14
Savings discipline 2 4 3 3 0 1 0 13
Compare savings sources 1 2 3 2 1 0 1 10
Table 6: Savings Categories
Borrowing
Almost all the modules make a mention of debt/loans/borrowing leaving aside the one CBO that
provides information only on savings. Possibly stemming from the many repayment delinquencies in
India, twelve of the seventeen organizations talk about the importance of repaying a loan and also try to
explain what a good loan and a bad loan is. This is usually an exercise to help people understand that
loans should be taken only for an income generating activity. Interestingly, only eleven organizations
compare credit sources and discuss the pros and cons of the different options with the audience. Ten
organizations break down the important characteristics of a loan product (formal and informal) to help
the audience better analyze the different sources and products before borrowing. Eight of the
organizations talk about multiple borrowing and ghost lending as a phenomenon. While only two
organizations talk about the credit bureau and explain the role of the credit bureau to the audience. This
last topic makes an appearance in one MFI’s module that doesn’t use a CBO module and one DO-MFI’s
module. Two organizations discuss repayment strategies and break down the idea of paying principle
and interest amounts in each installment to ensure the debt gets paid within a stipulated period of time.
Table 7: Borrowing categories
Insurance
The most disheartening finding from study the modules was the lack of information on
insurance. Only seven of the eighteen organizations made a mention of insurance in their FLT. And only
six walked the audience through the basic concepts and terms associated with insurance (usually life
insurance). Two organizations explained the various types of insurance policies there are in the market
and only one organization highlighted the important points to remember when buying insurance.
Table 8: Insurance categories
TopicsNBFC/
MFICBO Coop DO-MFI DO-P DO-F SHPI For All
Borrowing 4 3 3 3 2 1 1 17
Compare credit sources 1 2 3 2 2 0 1 11
Importance of repayment 2 2 3 2 2 0 1 12
Qs about loan characteristics 2 2 2 2 1 0 1 10
Credit bureau 1 0 0 1 0 0 0 2
Multiple borrowing and ghost lending 2 2 2 2 0 0 0 8
Good loan or bad loan 2 3 3 2 1 0 1 12
Repayment strategy (only interest vs
principal and interest repayments)1 1 0 0 0 0 0 2
Repayment ability 3 2 2 1 0 0 0 8
Types of formal loans 0 0 0 0 0 1 0 1
TopicsNBFC/
MFICBO Coop DO-MFI DO-P DO-F SHPI For All
Insurance 1 2 2 0 1 1 0 7
Basic terms and conditions 1 1 2 0 1 1 0 6
Types 1 2 2 0 1 0 0 6
Questions to ask before taking
insurance0 0 0 0 1 0 0 1
Pensions
Pension makes an even more scant appearance in the sample’s FLT. Only five organizations talk
about the importance of pension in addition to providing an introduction to the concept of saving for old
age and no more information is provided on this topic.
Table 9: Pension categories
Budgeting and planning
60% of the sample’s FLT features some aspects of budgeting and planning in their FLT.
Interesting Sub topics Organizations
Need vs Wants ISMW, Sewa Bank, Sewa Bharat and others using
ISMW module, Parinaam Foundation
Inflation ISMW, Sewa Bank, Sewa Bharat and others using
ISMW module, Parinaam Foundation
Table 10: Budgeting and planning sub topics and organizations
The session usually talks about the various types of expenses a family experiences in their everyday lives
(long term, short term, unexpected and expected etc.) and then talks about the importance of making a
budget or financial plan, track expenditures as closely as possible and separate the needs from wants to
cut back on unnecessary expenses. Only two organizations talk about using a financial diary to track the
household’s cash flow while five organizations talk about inflation and how that will affect the
household’s finances.
Table 11: Budgeting and planning categories
TopicsNBFC/
MFICBO Coop DO-MFI DO-P DO-F SHPI For All
Pensions 1 1 2 0 1 0 0 5
TopicsNBFC/
MFICBO Coop DO-MFI DO-P DO-F SHPI For All
Budgeting and planning 2 3 3 3 1 1 0 13
Types of expenses: short term,
long term, unexpected, expected2 3 3 3 1 0 0 12
Financial plan and making a
balance sheet2 3 2 3 1 1 0 12
Needs vs Wants 2 3 3 2 0 0 0 10
Financial diary 0 0 0 2 0 0 0 2
Inflation 1 1 2 1 0 0 0 5
Life Cycle of Events 1 1 2 0 0 0 0 4
Planned vs Unplanned Life 1 1 2 0 0 0 0 4
Numeracy
A surprisingly low number of organizations attempt to address the issue of low levels of numeracy
among their audience in their FLT modules. While many of them use stones/leaves and bindis to explain
topics that require counting or representing numbers, only two organizations teach their audience
addition, subtraction, multiplication and division in order to explain interest rates and other calculations
they need to make to track expenses or build saving plans. Both these organizations use the calculator
to teach their audience basic numeracy. Given the research findings on the effects of low level of
numeracy with individual’s decision13, it seems that there is a need to incorporate numeracy training in
the FLT modules.
Investments
One of the lesser mentioned topics in FLT modules in the sample are about investments. Only six
organizations talk about investing and provide ideas for investing money in financial products such as a
recurring deposit or fixed deposit. Five of these organizations also try to explain what could be a risky
investment and what options could be considered safe. These organizations also try to differentiate
between assets and liabilities, expenses and investments for their audience. One module talks about
more sophisticated modes of investments like the share market and mutual funds.
Table 12: Investment Sub topics and organizations
Interesting Sub topics Organizations
Identify asset vs liability/ expense vs investment Access Development Services and organizations
implementing ISMW module
Information on Share Market Sanchayan Society
Table 13: Investment categories
13
Unpacking the Causal Chain of Financial Literacy (Carpena et.al); Sept. 2011
TopicsNBFC/
MFICBO Coop DO-MFI DO-P DO-F SHPI For All
Investments 1 2 2 0 0 1 0 6
Ideas for investments 1 2 2 0 0 1 0 6
Secure investment options 1 2 2 0 0 0 0 5
Identify asset vs liability/expense
vs investment 1 2 2 0 0 0 0 5
Mutual funds 0 0 0 0 0 1 0 1
Share market info 0 0 0 0 0 1 0 1
Interest rates
While ten organizations in the sample mention the concept of interest in their FLT, only seven of
them talk about simple and compound interest rates, six of them talk about flat and reducing interest
rates and one organization talks about fixed and floating interest rates. It must be mentioned here that
without addressing numeracy issues, expecting the audience to assimilate information about interest
rates and making calculations on products that they use is close to impossible14.
Table 14: Interest rates categories
Others Topics
The handful of topics mentioned in some modules in the sample is binned into this category.
Two organizations teach their audience to recognize different currency denominations. Four
organizations spend time helping their audience organize their documents like proof of address, photo
ID, financial product documents etc. and one organization talks to their audience about the PAN card,
the credit card, their uses and associated facts.
Table 15: Other Topics and Organizations
Interesting Other Topics Organizations
Currency Recognition Parinaam Foundation, Swadhaar FinAccess
PAN Card Sanchayan Society
Credit Card Sanchayan Society
Table 16: Other topics categories
14
Unpacking the Causal Chain of Financial Literacy (Carpena et.al); Sept. 2011
TopicsNBFC/
MFICBO Coop DO-MFI DO-P DO-F SHPI For All
Interest rates 2 2 2 1 1 1 1 10
Simple and compound interest 1 2 2 0 1 0 1 7
Flat and reducing interest rate 2 1 2 1 0 0 0 6
Fixed Vs Floating rates 0 0 0 0 0 1 0 1
TopicsNBFC/
MFICBO Coop DO-MFI DO-P DO-F SHPI For All
Other 1 1 2 2 0 1 0 7
Currency recognition 0 0 0 2 0 0 0 2
Organizing documents 1 1 2 0 0 0 0 4
Credit card 0 0 0 0 0 1 0 1
Pan card 0 0 0 0 0 1 0 1
Sankalp – The Resolution Sankalp – The Resolution is a 30-minute film created by Ujjivan, Lok Capital and Unitus to impart financial literacy among the MFI clients. It shows how two MFI customers fall into the trap of excessive borrowing and ghost lending (major reasons for the MFI crisis), and have to face the consequent dangers. In addition to that it also explains the concept and importance of a credit bureau, and the importance of building a positive credit history. This film is available in 10 Indian languages at free of cost. Over 600000 customers have already watched the film at dedicated screenings; additionally over 20 million general public has also been covered by cable television which telecast the film. The movie is setup in loan officer meeting environment
where the Zonal officer interacts with certain group
members about the traps they may face in borrowing
loan. The first 15-minute focuses on ghost lending
which shows how a couple is cheated by a friend who
leads them to borrowing money from an MFI for his
business in turn giving commission to the lady and her
group members which he later defaults and escapes.
The second 15-minute shows how a family gets into
trouble by excessively borrowing from different
microfinance companies and struggles with high
repayment. The movie setup, visualization and the
characters involved demonstrates real life situations
which makes it interesting, better to remember and
understand than any other standard communication.
This movie is sure to pass the message to all the MFI
clients very effectively.
Methods used All thirteen modules in the sample use the
classroom method of instruction as the basis and
include a few other activities and methods of
communication to increase the level of interest
and interaction. While almost all the modules use
flipcharts/posters as visual aids to guide the
audience through concepts, stories and group
discussions to better explain principles and
concepts, only a few modules include relevant
and interesting games that re-affirm the
principles taught in the session. Songs are
incorporated in four of the modules in this
sample.
Similarly, only a few modules use movies
as a method for instruction but this can be
due to the operational challenges of
screening movies in resource poor
environments. But there is a growing
acceptance that movies are a powerful
medium to communicate simple and life
changing principles to large groups of
people. The Sankalp video is one such
example.
The most interesting and possibly
worrying observation is that only four of
the thirteen modules conduct session
recaps in successive FLT sessions to jog the
memory of beneficiaries on what was
learnt in the previous sessions. This
method is a recognized method to help
audience remember new ideas better by
expecting them to recall information that
was taught to them. Four of the modules
conduct oral quizzes or written tests either
at the end of each session or end of the
Suryodaya, an MFI based out of
Maharashtra, uses an innovative way to
educate its clients on social and financial
issues. It chooses a topic (education of kids,
savings, health etc.) and develops a script for
the same. It is then recorded in local
language using an audio device. This
recorded message is played in the weekly
meeting of the client. This attracts more
attention of the beneficiaries and they retain
it for a longer time. The process keeps the
message standardized for all clients across
different states and can be adopted by
developers and implementers of Financial
Literacy Training Programmes.
entire training to gauge the level of knowledge increase among the audience. Research15 has found that
tests can improve the attention span of training participants.
Table 17: Information on the different methods used by modules in the sample.
Interesting Methods Organizations
Songs Access Development Services, Accion
International, Reach India
Counselling Centres Sewa Bharat
Pack of Playing Cards Access Development Services
Developing Action Plan Access Development Services
Presentations Sanchayan Society
Helpline eCubeH Research Labs
Calculator Parinaam Foundation
Financial/ Budget
Diary
Parinaam Foundation and Swadhaar
FinAccess
Money Box Parinaam Foundation and Suryodaya
Savings Posters Swadhaar FinAccess
Table 18: Information on the different methods used by organizations
15
A.H. Johnstone, F. Percival, Attention Breaks in Lectures, Education in Chemistry, 13, 1976, 49
Organizations Stories Games Handouts/ Gifts
Samhita 4 1 0
Parinaam Foundation 13 1 4
Reach India 4 1 0
Mann Deshi 11 0 0
Accion/ PiP 5 6 0
ISMW/ SEWA 25 4 0
Sanchayan Society 1 1 Variable
Pradan 0 0 0
Trident 0 0 0
SKS 1 1 0
Access Development Services Variable Variable Variable
Swadhaar FinAccess 10 4 4
Chapter 5: Characteristics of FLT (number of sessions, length, TOT) Apart from the content module, a very important aspect of imparting training is the delivery mechanism
deployed. Even an interesting and useful information could become unappealing to the audience when
communicated in a tiresome and unacceptable manner. A judicious planning of the training in terms of
finalizing the number of sessions, duration of each session and methodology, thus becomes very
important for any training programme. It becomes all the more essential for the illiterate or partially
literate adults who find it difficult to associate any worth to such oratory lessons.
Among the various participating organizations, only two of the
organizations in the sample use a single session for their FLT/
induction program while one of the CBOs conducts a 2 day
long FLT program for their beneficiaries. Six of the remaining
organizations have five to seven sessions while the remaining
have three to four sessions for their FLT beneficiaries. Length
of these sessions most frequently are about an hour long, only
two programs are about eight and five hours each (CBO and
DO-P respectively), these are also the organizations that have
only one or two sessions in total for the training. There are
contradictory theories that organizations dealing with FLTs
believe in. While some believe that their beneficiaries prefer
to allocate one or two days entirely and therefore are more
likely to attend the FLT program if it is conducted as an intense
two day course, other organizations believe that it is better to spread the sessions across a few months
and ensure that each session is short enough to be able to fit into the beneficiaries busy schedules.
When beneficiaries are asked about their preference before designing some of the training
programs, they have reported that they would prefer it to be conducted in as few days as possible. It
therefore seems that intense 1-2 day FLT programs might draw the highest attendance. When
considering this from an educational point of view, providing financial information that can be dense
and completely new to some people who might not be accustomed to sitting for hours in a classroom
session could result in poor comprehension and even poorer recall. Studies16 do mention that an
average individual has an average attention span of ‘10-18 minutes’ and schools try to time their classes
around this number. It would seem that if knowledge gain and behavioral outcome were the desired
outcome, this aspect of financial education is taken into consideration.
16
A.H. Johnstone, F. Percival, Attention Breaks in Lectures, Education in Chemistry, 13, 1976, 49
ScheduleNumber of
SessionsDuration
2 days 2 7
Customized 4 3
weekly once 5 7
Customized 5 7
Customized 4 2
Customized 1 5
Customized 5
1 day 6 7
Customized 6 7
3 days 3 3
2 days 2 17.4
Flexible 4 2
Weekly during meeting 7 3.5
Flexible 4 2
weekly once 5 10
Customized 5 7
Customized 5 10
Table 19: Schedule of FLT sessions and total training
duration
Profile of Trainers
Trainers play a critical role in the delivery of the modules and can greatly influence the outcome
of the training. While looking at the trainers’ profile, we found some interesting facts. While some are
committed trainers, others are credit officers in the microfinance organizations and still others are
mature and accomplished members of the SHG federation. The rationale behind each of these strategies
does address one of the many issues that plague FLT programs around the world. Using a committed
trainer ensures that the program follows a regular schedule, standard method of training and more
qualified attention for the beneficiaries of the training program but this could have cost implications
that many organizations would not be willing to commit to.
Using existing staff from the organization, addresses the issues surrounding costs for
implementing FLT programs, but limits the scope of the program as it needs to be able to fit into an
employee’s already packed schedule. The employees don’t always have the qualities of a good trainer
and their workload might dilute their ability to train the audience on the various concepts. The
effectiveness of this model depends on how committed the organization is in providing high quality FL
training to their clients and realistic their goals for the program are. If the workload for the field officers
is not reduced in order to make time for FLT sessions, it would be very difficult to conduct these
sessions. Additionally, a few organizations in the sample were struggling with trying to communicate the
importance of their staff conducting FLT sessions, as the organization’s main mission is providing
financial services or helping build livelihood options etc. When mature and exceptional members of SHG
federations are used as trainers, the divide that could be caused by an outsider trying to teach people in
a community is bridged. But unless the trainers are remunerated sufficiently, or provided an adequate
incentive, this model might not work consistently across regions. In all the above models, systems need
to be set in place to monitor the progress of the training sessions, outcomes need to be tracked and
issues on the field need to be addressed on a regular basis for FLT programs to be provided consistently
and their content to remain relevant for the audience.
Constrained Modules
The modules that were provided to the researchers for the study were formatted in formats
that would be easy to read and follow. There were two modules that were difficult to follow for very
different reasons. One of the modules was entirely in a regional language and the organization was not
able to provide an English version. Due to lack of funds and shortage of time, the module could not be
translated into English and a very quick and dirty translation was requested of a native language
speaker. This was a huge draw back in the researcher’s ability to analyze the content of the module.
Aside from this issue, the lack of an English version is a hurdle in scalability of this module to other
regions as finding translators who are familiar with English and a regional language are more common
than two regional languages. The second module was formatted much like an essay, activities and
stories were not highlighted, objectives for sessions were not bulleted and there were no instructions
for the trainer. The entire module was very content heavy without many illustrations or activities to
break the monotony. From a trainer’s point of view, it was a very unwieldy manual.
Key Points
1. Some organizations have realized the
importance of reaching the youth
with financial literacy training
programme.
2. Institutions believe that
complementing financial literacy with
some livelihood programme would
increase the take up and influence of
the former.
3. High cost associated with the
implementation of financial literacy is
a common concern.
4. Debate on who should bear the cost
of implementation seems to have no
end.
Chapter 6: Management views and perception on FLT As mentioned in an earlier chapter, management interviews (Refer to Appendix A2) were conducted to
understand how the developers and implementers of training programmes perceive their success and to
know about their learning in the entire process. Only very few institutions arranged a visit to the
participant after the training to measure the impact of the programme but the methods used were not
very scientific in nature. Some organizations have, however, tried to measure the impact by conducting
tests before and after the trainings were conducted. With whatever crude methodology was used to
judge the impact, organizations seem to attribute the observation of increased savings, better cash
management etc. among the target community to their respective financial literacy training
programmes. All the participating organizations are satisfied by the observable outcomes but still feel
the need of a system that can give them some concrete and authentic indication of the success of their
programmes. Requirement of a system that assures standardization, monitoring and quality is also felt.
Managements have found the beneficiaries of these
programmes to be enthusiastic and loyal to the programme.
For them, the idea of accumulation of money is interesting
enough to catch their attention. In some cases,
beneficiaries, themselves, demand the explanation of some
financial concepts and products. This is really encouraging
for the organizations.
When asked about the best approach towards imparting
financial literacy, almost all opined that the programme
should be spontaneous and simple but should have a
defined methodology, especially when it is for the poor and
illiterate. The programme should be designed in a way that
people start raising questions and discussions. Interviewee
from Access Development Services said that school going
kids should be targeted as they are the ones who can
demand financial products from their parents and motivate
them to be aware of the financial concepts. Many felt that innovative and interactive methods like
screening movies in local language and skit create a better impact.
While suggesting the best approach, A few organizations strongly felt that Financial Literacy programs
should be complemented by a livelihood program as participants are then able to relate the training
with their real life with a better understanding of things. One of the learning from conducting these
programs is that it needs to cover topics for people from different settings and different communities,
and at the same time, it needs to be more tailored to heterogeneous needs of the clients. Also, the
topics should be presented in an organized and proper and logically sound sequential manner so that
beneficiaries can relate to the concepts. People should be told about the fraudulent schemes and about
the factors that they should consider before buying any financial product. Also, linking the customers to
the product that they are told about builds trust in the community and it becomes all the more
important in case of low income groups as they have lesser sources of information and a very ill-
informed peer group.
All said and done, organizations are worried about the high cost associated with the development and
implementation of a financial literacy training programme. So, they feel that something should be done
in this regard by the government. Government officials, on the other hand, believe that the
responsibility of training the clients/ beneficiaries should be assumed by the organizations themselves as
imparting financial literacy helps the organizations as well, directly (by creating demand for more
products) or indirectly (by supporting them in their cause of addressing poverty).
Chapter 7: Client survey analysis17
The case of little response from the target population towards both the conventional and innovative
financial products in rural areas has received a lot of global attention. Literacy levels and more
importantly the lack of financial awareness have been held responsible for this phenomenon. And in
order to address this issue, numerous financial literacy training programmes have been designed, tested
and implemented using various methods and technological setups. Significant amount of research has
also been done to evaluate the effectiveness of these training programmes but their methodological
limitations and inconclusive results did not help the policymakers much to take a firm action plan. All
this muddled up landscape of financial literacy can be attributed to the lack of a universal definition of
the term that makes it difficult to tag an individual as “Financially Literate”. Although the need and
importance of financial education has been globally realized, there exists no benchmark to measure the
success of efforts that are put in to achieve it.
Each of the implementing agencies that are working in this realm of financial literacy develops the
training programme as per its own customized definition of the concept. Some focus on savings and
financial planning, others on numeracy along with these two and still others add banking and best
borrowing practices to the list. Customization is required but it ought to be done as per the actual need
of the target community and not according to implementer’s perception about it.
To understand beneficiaries’ perspective about training quality, delivery and management and
evaluating their current levels of financial knowledge and awareness we undertook a beneficiary survey
where the beneficiaries of 5 of the participating organizations were interviewed. Also an additional
sample of youth from 6th participating institution was interviewed which has been analysed separately in
this chapter because of the different characteristics they possess. The questionnaire for both these
samples was accordingly divided into three sections: 1. Training Delivery and Management, 2.
Beneficiaries’ Perspective, and 3. Knowledge and Application. First section asked them to list the topics
covered and material used in the training programme, mention the duration, venue and number of
participants and trainers. As part of the section on beneficiaries’ perspective, respondents were
primarily asked to evaluate the quality of training based on some specified parameters like topics
covered, methodology, material, venue, trainer, duration, usefulness etc. It also compared their self-
perceived sense of current financial capability with that they possessed before the training programme.
To test how the beneficiaries retain the knowledge that they acquired from the trainings an actual
financial capability of beneficiaries was then judged in the third section where they were asked
questions on numeracy, interest rates, budgeting, money management and financial products (Refer to
Appendix A3). Rest of the chapter presents overall findings from these surveys of (1) 100 people (20
from each of the five organizations) who are women belonging to an SHG or a JLG group. For institution
17 CMF conducted another study to measure the financial literacy levels in the country by interviewing
397 people across nine states. Refer to appendix A7 for the details of the study and its findings.
wise responses to the questions asked, please refer to appendix A4 and (2) 36 youth trained by one
institution but associated with government schools, private schools, NGOs and colleges. For a category
wise tabulated response of youth, please refer to appendix A6.
Client Survey: Basic Findings
Training Delivery and Management
This section of the questionnaire (Refer to appendix A3) aimed at capturing the training mechanism as
was delivered to the respondents. Tables below, (7.1.1a, 7.1.1b, 7.1.1c and 7.1.1d) tabulate the
responses. The afternoon sessions seems to be most popular timing for delivering the FE followed by
morning sessions - 53 per cent of the participants were given training in the afternoon, while 36 per cent
received the training in the morning sessions. It seems that post-work sessions are still not very popular
(most likely due to the logistic issues) as very few FE sessions were delivered in the evening and at night.
Most of the providers deliver training sessions to a large group- around 68% of all sessions had more
than 20 attendees with 39 per cent of the trainees attended the training in a large group of more than
30 women.
Time of Training Participants (%)
Morning 36.00
Afternoon 53.00
Evening 4.00
Night 7.00
Time of Training
Group Size Participants (%)
Less than 10 6.00
10 to 15 17.00
15 to 20 9.00
20 to 30 29.00
30 and More 39.00
Number of Participants
Duration Participants (%)
Less than 1 hour 15.00
1 hour 25.00
1.5 hours 12.00
2 hours 35.00
More than 2 hours 14.00
Duration of each session
Table 7.1.1a Table 7.1.1b
Table 7.1.1c Table 7.1.1d
Methods Participants (%)
Stories/ Puppets 92.00
Posters 78.00
Group Discussions 73.00
Flip Charts 60.00
Movies/ Visual Aids 40.00
Handouts 31.00
Skits 26.00
Games 25.00
Methods Used for Training
Key Results
1. Afternoon is the most popular time for delivering sessions.
2. Sessions in general are delivered in large groups of 20 or more.
3. Most sessions, on an average, are conducted for more than 2 hours.
4. Stories/ Puppets and Posters seem to be the most commonly used methods of training.
Majority of the sessions stretched for over 2 hours on average,18 while only 15 per cent cases the
sessions were less than an hour of duration. Methods and equipment used to deliver the training ranged
from stories and skits to group discussions and movies or other visual aids. The most common ways used
are stories followed by posters and group discussions. The least popular methods are games and skits.
55 percent of the respondents visited a formal financial institution (a bank in most cases) for the first
time after the training programme and 15 per cent of the interviewees had not visited a formal financial
institution at all till the time of the interview.
Perceived Financial Capability
To find whether the training resulted in change in self perceived sense of knowledge of some important
parameters, respondents were asked to rate their comfort levels on some of the most commonly used
concepts (savings, borrowing, insurance, numeracy, household budgeting and cash-flow management in
business) related to financial literacy before and after the training (Refer to 2.13 to 2.18 of appendix A3).
The following table (7.1.2a) presents the percentage of people and their self-reported ability to handle
various subjects in pre and post FE training periods.
As can be depicted from the table (7.1.2a), the perceived level of capability of people has increased after
receiving the training across all the important segments of financial literacy but there has been a marked
improvement in the way people understand savings after the training. Only 21 per cent of women
interviewed used to save before the training but the percentage increased to 90 per cent after the
training. 68 per cent of people have started practicing the concepts of borrowing indicates that they
think that they know of all the available options of borrowing in the neighbourhood and are self-
sufficient in weighing them. Although the concept of insurance is complex, the percentage of people
having an insurance increased from 16 percent to 60 per cent. It is encouraging to know that people
maintain household budgets, if not using the financial diaries (that they were given during the training),
18
Information on the number of sessions could not be incorporated here because of many missing responses.
Before After Before After Before After Before After Before After Before After
Did not know anything about it 22.00 3.00 34.00 3.00 35.00 6.00 41.00 8.00 33.00 4.00 29.00 13.00
Knew about it but not how to do it 47.00 5.00 38.00 13.00 37.00 12.00 32.00 14.00 25.00 7.00 7.00 4.00
Knew about it and how to do it but did not practice it 10.00 2.00 11.00 16.00 12.00 22.00 10.00 11.00 26.00 10.00 6.00 8.00
Knew about it and practiced it 21.00 90.00 17.00 68.00 16.00 60.00 17.00 67.00 15.00 79.00 6.00 25.00
Cash Flow
Management in
BusinessComfort Level with the Subjects
Savings Borrowing Insurance Numeracy Household
Budgeting
Table 7.1.2a
in some other way of their own. Only 50 per cent of the interviewees in the sample owned a business
and their ability, according to them, has also increased but not as much as in other areas.
Knowledge and Application
In this section, we would like to explore the knowledge retained by the beneficiaries with respect to the
important parameters such as numeracy, understanding interest rates, money management and
knowledge of basic financial products.
Numeracy
Most of the organizations that develop and implement the modules for financial literacy believe that
possessing basic numeracy skills is a prerequisite to understanding financial concepts. These
organizations have put in efforts to educate their clients on basic mathematics (refer to Chapter 6).
However, there are a few others who think that people need not be taught mathematics in financial
matters as they are smart and experienced enough to handle and manage money. Beneficiaries who
participated in the survey were given some imaginary situations (and not crude numbers) to understand
if they can do basic calculations (using numeracy skills or just by intuition). Each correct response to
questions 3.05 (addition and subtraction), 3.06 (division) and 3.07 (division) (Refer to appendix A3) was
given a score of one and a wrong answer a score of 0 and then we calculated total score obtained by the
respondents that ranges from 0 to 3.
Table 7.1.3a presents the percentage of respondents receiving the
score on a scale of 0 to 3, with 0 representing the case where
answer to none of the three questions was correct and 3
representing the a situation where the beneficiary answered all
the questions correctly. As can be depicted, a majority (87 per
cent) could answer all the three basic questions correctly and there
were no cases of all incorrect responses. The respondents might
not be good with calculations using crude numbers but they can
arrive at correct figures when asked in a form of a situation.
Understanding of Interest Rates
It is extremely important to understand interest rates, even if not
being able to calculate the exact number, for being able to decide
among the plethora of financial products. To understand this ability
of the respondents in sample, a question (3.10: Refer to Appendix
A3) was asked wherein they were asked to choose the best among
two given products based on different interest rates that they
offered. A correct answer to this question was awarded a score of 1 and a wrong answer was scored a 0.
As can be depicted from the adjacent table 7.1.3b, 62 per cent of women could respond correctly by
identifying the correct product and 37 per cent did not know the correct answer.
Scores Participants (%)
0 0
1 2
2 11
3 87
Numeracy
Scores Participants (%)
0 38
1 62
Interest Rates
Table 7.1.3b
Table 7.1.3a
Money Management
Being able to manage money in terms of being able to track cash flow and maintain a budget (mentally
or in books) is an important and expected outcome of financial literacy training programme. Money
management can lead to a drop in unnecessary expenses resulting in higher levels of savings. There
were two questions asked to judge how well respondents understood the principles of money
management. First was a simple short case of a vegetable vendor and respondents were asked to
suggest her ways of increasing her savings (Refer to 3.08 of Appendix A3). This was a level 1 question
which just required basic understanding of the concept. There were two possible responses to this
question. Respondents who gave both the answers were awarded a score of 2, those who could answer
any one of the two was given a score of 1 and those who did not know or gave a wrong answer were
scored a 0. Second question was a level 2 question and was more difficult. This question tested women
on their ability to allocate funds in a given scenario (Refer to 3.09 of Appendix A3). If responded
correctly, the maximum score that anyone could get on this case was 1. A 0 was given for a wrong
response.
Table 7.1.3c depicts the scores respondents received on the
aspect of Money Management. Even though a high percentage of
beneficiaries (73%) could correctly answer one of the two
questions in level 1, only 11% could answer both questions
correctly.
The poor performance of the respondents with money
management becomes even more obvious from the responses to
level 2 question. A predominant fraction of the respondents (84
per cent) prefer to save a lumpsum money at a low interest rate
as opposed to using that money to repay an existing expensive debt. This concept is very important for
people to understand as such a behavior forces people to borrow beyond their capacity and to remain
caught in the debt trap, but unfortunately, a vast majority of the respondents could not identify the
correct strategy with money management.
Knowledge of Formal Financial Products
Once financially literate, people are expected to understand
basic financial products and to make an informed choice to use
the ones that suit their requirements. Knowing about the
products is not sufficient for making an informed decision. One
should be aware of the best practices or of the ways that
maximize the economic payoffs. To determine if the trainees of
different financial literacy training programme were aware of
the financial products and best practices, they were given three
hypothetical situations (related to Savings and Insurance) where they had to weigh different options and
suggest appropriate products (Refer to 3.11, 3.12 and 3.13 of Appendix A3). A correct answer was
Scores Participants (%)
0 3
1 21
2 37
3 39
Financial Products
Scores Participants (%)
0 16
1 73
2 11
Scores Participants (%)
0 84
1 16
Money Management
Level 2
Level 1
Table 7.1.3d
Table 7.1.3c
awarded a score of 1 and a wrong answer was given a 0. Table 7.1.3d present the overall scores on
knowledge of financial products attained by the sample interviewed. 39 per cent of the people could
answer all the three questions correctly. Subsections that follow present the findings for knowledge of
savings and insurance products separately.
Savings: Performance of the respondents on knowledge of Savings
products can be depicted from table 7.1.3e. The two questions
asked tested the understanding of basic savings products offered
by a bank or a post office. 46 per cent of the respondents could
answer both the questions correctly and 49 percent could score a 1
by answering just one of the two questions correctly.
Insurance: A simple question was asked to test respondents’
knowledge of insurance products. Interviewee was required to
suggest the type of insurance product that a person should opt for
in an imaginary situation. Table 7.1.3f shows that 71 per cent of
the people could give a correct response to the question asked
and 27 per cent gave a wrong answer. So this actually indicates
that the beneficiaries of financial literacy training are actually well aware of the concepts of insurance.
Perceived Financial Capability vs. Knowledge and Application
Having looked at the characteristics of the sample in earlier two sections by understanding their self-
reported ability to handle financial activities and their current knowledge and application levels, this
section now compares the two. It tabulates the range of scores obtained by the beneficiaries who
perceived to have understood and practiced different parameters that are considered to be critical
components of financial literacy.
Numeracy
Columns in Table 7.1.4a represent the distribution of
scores on numeracy skills of those who used to practice
numeracy (i.e. use numeracy skills in day to day activities)
after the training programme (67% of the entire sample)
and percentage of people who practiced numeracy after
the training programme. As can be seen from the table,
those who seemed to be comfortable with numeracy
after the training mostly achieved the highest possible
score of 3, indicating that a predominant majority of
those who felt comfortable after training actually seem to have achieved maximum score using their
retained knowledge.
Scores Participants (%)
0 5
1 49
2 46
Savings Products
Scores Participants (%)
0 27
1 71
Insurance Products
Scores Participants (%)
0 0.00
1 0.00
2 8.00
3 92.00
Numeracy of participants who practice it
Table 7.1.4a
Table 7.1.3f
Table 7.1.3e
Money Management
Tables 7.1.4b and 7.1.4c compare the self-reported
ability of the participants to use money management
principles with the score that they attained during
their interview. 15% of the respondents interviewed
were practicing money management principles even
before they received the training, 79% were
practicing after they received the training and 65%
were practicing only after the training programme
and not before it started. A huge gap can be inferred
in the perceived ability and actual ability of the
trainees among the respondents who thought that
they were managing their money well after the
training programme, only 14% could achieve a
maximum score of 2 in level 1.
This gap is more prominent in case of level 2 scoring. Although the percentage of people who perceive
that they can do money management well has increased after the training, a vast majority of them
(89%) actually could not answer the more complex question on money management.
Savings
21 per cent of respondents reported to have
saving and being aware of varied savings
products before the training. This percentage
increased after the training programme to 90
per cent. 69% of respondents were saving and
were aware of the savings products only after
the training programme and not before it
started. Table 7.1.4d presents the scores of
respondents from these three categories.
Correspondence of scores with the comfort
levels can be inferred from the table but trainees are yet to be strengthened on their knowledge and
awareness of savings products.
Borrowing
17 per cent of respondents reported
themselves to be able to weigh all the
borrowing options available in their
neighbourhood. This percentage increased to
68 per cent after the training programme. 51
per cent reported to be equipped with this
Before (15%) After (79%)After not
Before (65%)
0 0.00 16.46 20.00
1 93.33 69.62 64.62
2 6.67 13.92 15.38
Money Management of participants who practice it
Scores
(Level 1)
Participants (%)
Before (15%) After (79%)After not
Before (65%)
0 100.00 88.61 86.15
1 0.00 11.39 13.85
Money Management of participants who practice it
Scores
(Level 2)
Participants (%)
Before (21%) After (90%)After not
Before (69%)
0 4.76 3.33 2.90
1 38.10 45.56 47.83
2 57.14 51.11 49.28
Savings Knowledge of participants who practice it
Scores
Participants (%)
Before (17%) After (68%)After not
Before (51%)
0 17.65 32.35 37.25
1 82.35 67.65 62.75
Borrowing Knowledge of participants who practice it
Scores
Participants (%)
Table 7.1.4e
Table 7.1.4d
Table 7.1.4b
Table 7.1.4c
ability only after the training programme and were not able to apply the concepts even if they knew
those before the training programme. Table 7.1.4e shows that 32.35% of women who, after being
trained, thought they were able to select the best available option failed to answer the question on loan
options correctly.
Insurance
Table 7.1.4f compares the scores on the
knowledge of insurance products with the self-
reported ability to understand the need and
relevance of insurance. 16% of the
respondents indicated that they were familiar
with the concept of insurance before the
training was conducted and had at least one
member of their household insured. Of the 60
percent people who understood the concept of insurance and had at least one member of their
household insured after the training programme, 22 percent don’t really seem to understand the
concept of it. The question asked was very basic in nature and didn’t involve the use of any technical
term like a premium or return. A more complex question would have likely increased the percentage of
incorrect responses.
These comparisons show that the majority of the beneficiaries who did not have pre-existing knowledge
and learnt a particular concept only from the FLT modules, have grasped the concepts quite well as a
large fraction of those (ranging from 49- 72% in questions excluding money management) have retained
their knowledge and answered the evaluation questions correctly.
Client Survey: Youth
A growing body of Research in Financial Literacy has recently focused on capturing the effect of financial
literacy programmes on different demographics. With inadequate evidence of successful financial
literacy training programmes, questions are raised on the efficacy of the programme implementation
and have made researchers think about customizing the financial literacy training programme for
different populations. Lusardi (2008), in her paper: “Financial Literacy: An Effective tool for informed
Consumer Choice” mentions that individuals are most prone to decision-making in specific time periods
like at the start of a new job that pushes people to think about saving, and suggests the importance of
exploiting such “teachable moments”. Based on findings from his study, he also recognizes the
importance of a training programme being able to cater to the differences among individuals, not only in
terms of preferences and economic circumstances but also of their existing levels of information,
financial sophistication, and ability to carry through with plans.
As part of the scoping study, a survey was conducted with youth as well to understand their levels of
Financial Literacy after they have received a training programme. Sanchayan Society, an organization
based out of Delhi, designs and conducts Financial Literacy Training programmes for youth studying in
government schools, private schools and colleges. They also collaborate with NGOs to train
Before (16%) After (60%)After not
Before (44%)
0 6.25 21.67 27.27
1 93.75 78.33 72.73
Insurance Knowledge of participants who practice it
Scores
Participants (%)
Table 7.1.4f
disadvantaged youth. They customize their training module as per the requirement of target beneficiary
and is more focused on the formal financial products that youth is expected to use once employed. A
sample of 36 young students distributed across all these four segments was selected randomly and
interviewed. They were asked about the training programme they went through and their perspective
towards it. They were also tested and scored on their numeracy skills, money management behaviour
and understanding of financial concepts & their application (Refer to Appendix A5 for the questionnaire
and Appendix 6 for institution wise details). Remaining chapter presents the findings from this survey,
however, the findings could not be generalized as it is from a particular provider and as a result, may not
be representative of the universe.
Knowledge and Application
Numeracy
The section of young population that is getting an opportunity to get educated is expected to be able to
make calculated decisions as they are assumed to be more aware of the macroeconomic concepts like
inflation that affect one’s earnings and investments. 36 respondents of this survey were tested on their
numeracy skills (percentages and interest rates) that are required while deciding on a product among
others offered by the complex financial landscape. Three such questions were asked (Refer to 3.01, 3.02
and 3.04 of appendix A5). Students were given a score of 1 for every correct response and therefore, the
maximum score that anyone could attain was 3 and the minimum was 0.
Adjacent table 7.2.1a depicts the percentage of youth that obtained
different scores. Only a very small number of students could answer
all the three questions asked correctly. More than half of the
respondents could give correct answers to 2 of the three questions.
The commonality among these people is that they could work
correctly with percentages but could not apply this mathematics to
the financial products. Of the 36 students, 32 could give a correct
answer to the very basic question on numeracy but as the difficulty level increased, the number of
correct responses decreased to 25 (69.44%) and then to 3 (8.33 %).
Money Management Behaviour
Participants of the survey were given a list of
eight practices related to money management
and were asked how often they followed those
practices (Refer to 3.05 to 3.12 of appendix A5).
Adjacent table 7.2.2a gives the percentage of
youth that exhibit a good or poor money
management behaviour. First column in the
table lists the number of practices (out of 8) for
Practices Good MMB (%) Poor MMB (%)
0 0.00 5.56
1 0.00 36.11
2 5.56 33.33
3 19.44 19.44
4 44.44 2.78
5 22.22 2.78
6 8.33 0.00
Money Management Behaviour (MMB)
Scores Participants (%)
0 2.78
1 36.11
2 52.78
3 8.33
Numeracy
Table 7.2.2a
Table 7.2.1a
which the corresponding rows and columns give the percentage of youth demonstrating a good or poor
money management behaviour.
As can be depicted from the tables, none of the participants practice a 100 per cent good management
behaviour. 30.55% of the youth follow more than half of the listed good practices. Approximately 24% of
the youth do not follow 3-5 good practices and most of these are associated with NGOs or Government
Schools in the sample. This can be attributed to their lack of awareness about financial products and to
their current economic condition where they would prefer liquidity of money at all times.
The table below (7.2.2b) gives the details on money management behaviour and shows which kind of
practices do youth tend to follow more and the practices which they find it difficult to relate to.
97.22 per cent of the youth carefully consider the affordability of an item before purchasing it and 75 %
of the people who do this also following more than 3 good money management practices. Among the
63.89% people who pay their bills on time, 55.56% also follow more than 3 good practices. 75% of the
youth who practice at least 2 good money management activities, find it more satisfying to spend
money than to save it for the long term. Respondents who are prepared to risk their money while
investing is very high.
Understanding of Financial Concepts
Another section in the questionnaire tested the respondents on their understanding of financial
concepts/ products. Four questions were asked in this section (Refer
to 3.15 to 3.18 of Appendix A5). Correct response was awarded a
score of 1 and a wrong response was given a score of 0. Therefore,
the final scores received by anyone could range between 0 and 4.
As can be depicted from the numbers in the table (7.2.3a), none of
the respondents could answer all the questions correctly. 22.22 per
cent answered 3 questions correctly. Most of the youth (38.89%)
could correctly respond to just one out of the four questions and
therefore got a total score of 1.
PracticesCheck
AffordabilityLive for Today
More Satisfied
to spend
Money
Pay Bills on
Time
Take risk while
Investing
Watch on
Financial
Affairs
Set Long Term
Financial Goals
Follow
Monthly
Budget
2 5.56 0.00 2.78 0.00 2.78 0.00 0.00 0.00
3 16.67 5.56 2.78 8.33 8.33 2.78 2.78 11.11
4 44.44 16.67 5.56 27.78 2.78 16.67 33.33 30.56
5 22.22 16.67 5.56 19.44 0.00 19.44 16.67 11.11
6 8.33 8.33 8.33 8.33 0.00 5.56 5.56 5.56
Total 97.22 47.22 25.00 63.89 13.89 44.44 58.33 58.33
Good Money Management Behaviour (Details)
Table 7.2.2b
Score Participants (%)
0 11.11
1 38.89
2 27.78
3 22.22
4 0
Understanding of Financial
Concepts
Table 7.2.3a
Application of Financial Concepts
To check how well the respondents can apply the financial concepts to live examples, they were given a
short case and were asked 5 questions based on the same (Refer to
3.19 to 3.23 of Appendix A5). Solving the questions required them
to apply mathematics to basic financial concepts/ terminology (like
provident fund, tax deductions etc.) that they are going to
encounter in near future. Minimum and maximum scores that any
respondent could receive were 0 and 5 respectively. Table 7.2.4a
gives the percentage of youth receiving a particular score.
38.89 per cent of the respondents answered all the five questions
correctly and 30.56 per cent could not give a correct answer to
more than 2 questions.
Understanding of Financial Products
Understanding of financial products (Savings and Insurance) of the
sample was tested using three questions (Refer to 3.03, 3.13 and
3.14 of appendix A5). The questions asked about the need of
insurance and properties of savings products. Scoring
methodology was as adopted in the earlier sections: a correct
response getting a 1 and a wrong response getting a 0. So, the
maximum possible score that could be attained on this parameter
was 3.
As can be seen from table 7.2.5a, 38.89 per cent of youth scored a total of 3 by answering all the
questions correctly and 8.33 per cent of respondents gave a wrong answer to all the three questions.
Score Participants (%)
0 5.56
1 11.11
2 13.89
3 13.89
4 16.67
5 38.89
Application of Financial
Concepts
Scores Participants (%)
0 8.33
1 27.78
2 25.00
3 38.89
Financial Products
Table 7.2.5a
Table 7.2.4a
Chapter 8: Government Initiatives
Financial Literacy and Credit Counselling Centres The broad objective of Financial Literacy and Counselling Centres (FLCCs) as outlined by Reserve Bank of
India (RBI)19 is to provide free financial literacy and credit counselling to people in rural and urban areas.
Specifically, these centres aim at educating people about the availability, use and benefits of various
financial products and services offered by the formal financial sector; they are also responsible for
offering credit counselling to the indebted individuals (to formal or informal financial sectors). Because
these FLCCs are associated with public and private banks, they can reach out to the maximum number
of people possible. In order to understand the functioning of these centres, they were planned to be
included in the scoping study.
Reaching out to FLCCs:
Despite having existed for over three years now, even as only a concept, researching about the current
status of FLCCs in various states of India was astonishingly difficult. To begin with, there was not much
information available online that could have been used to contact the concerned officials. Some of the
banks do mention FLCCs on their websites but in most of the cases, this information is either incorrect
or outdated; phone calls went unanswered during the mentioned working hours and in some extreme
cases the bank branch did not exist. After 2 months of constant effort, only one FLCC was identified,
located and interviewed. The following passage recounts this experience by comparing the ideal with
real world situations . The interview was conducted with the counsellor of Punjab National Bank’s FLCC
and later another interview with a professor at College of Agricultural Banking, Pune was conducted to
assimilate additional infomration.
Comparing ‘To be Achieved’ with ‘The Achieved’:
1. Organizational/ Administrative Set-up: The counselling centres are expected to maintain arms
length relationship with the associated bank and preferably not be located in the bank’s
premises. In cases where the bank premises are being used to minimize costs, the centres should
be kept separate and should not be perceived as a recovery or marketing agent of the bank. The
FLCC visited does meet this expectation but the relationship with the concerned bank is so
distant that bank officials are not aware of the centre situated 50 metres away from the bank
branch and are unable to guide anyone to that place.
2. Infrastructure: Banks are required to provide proper infrastructure to FLCCs with adequate
communication and networking facilities. Although, the physical infrastructure provided looks
good, it is not equipped with adequate communication facilities. Internet connectivity is poor
which definitely slows down the process of information gathering and dissemination.
3. Types of Credit Counselling: Banks may seek help of the counselling centres in preventing the
expected default by referring to them the cases where they can sense some warning signals. This
would make FLCCs provide some counselling to the consumer before his further financial
19
RBI Circular issued on February 4, 2009. (RBI/ 2008-09/371; RPCD.CO.MFFI.BC.No.86 /12.01.18/2008-09)
deterioration. Banks seem to have neglected this aspect that can help them reduce the number
of defaults. They do not direct anyone to counselling centres and nor do they seek counsellors’
help in reaching out to expected defaulters to offer preventive counselling.
4. Mechanism for Credit Counselling and Debt Settlement: As mentioned above, banks could
encourage customers in distress to approach FLCCs that they have set up. FLCCs could conduct
some open-house seminars for group-counselling and they could also assist borrowers in
negotiating with the banks concerned. All three suggested mechanisms for Credit Counselling
and Debt Settlement can work only with some level of communication between different banks
and the FLCCs. Current communication gaps between the two is huge and it can be bridged only
if the efforts are made from both the parties.
5. Qualification and Training of Counsellors: Qualification of the counsellors is crucial to the
successful working of FLCCs. Counsellors are expected to disseminate the information that is
complete and correct. They are required to be qualified and trained enough to respond to any
query related to financial matters spontaneously. For the purpose of this, they should be trained
on a regular basis to keep them abreast with the latest developments in the banking sector and
to help them upgrade their skillset. Even though the counsellors appointed for the responsible
position are well qualified, they are not given any specialized training in counselling and debt
management. They do not have a document that guides them through their job description.
Counsellors, once appointed, are mostly left to themselves without any specific task list or
guidelines. They are responsible for updating and training themselves using any means or
resource.
6. Types of interface: Counselling centres are expected to be responsive and approachable. They
should be equipped to deal with requests received in person, by phone, posts, e-mails etc. They
should be having a toll-free number or some other easy ways that people can use to reach them.
As mentioned in the beginning of the chapter, counselling centres are difficult to reach out to.
Even if they exist, there are no easy ways to approach them. Communication is possible on a
single landline number or an email id but the calls and emails are hardly responded to. This
makes it difficult for the target population to avail the services when they need them and also
builds a bad rapport with people who start perceiving it as a laid back and irresponsible service
provider.
7. Monitoring: The functioning of FLCCs may be monitored by RBI and associated banks should be
updated on a monthly or quarterly basis. But no such systematic reporting and monitoring
system seems to be in place. There is no specific reporting format that the counsellors are
supposed to use. They send in a report (via email) in a self-created format to the concerned RBI
officials and none to the associated banks. These emails are not responded back to. In all, there
is no standardized process that is followed or that can be looked at to evaluate the progress and
quality.
8. Publicity: Apart from educating and making people aware of various financial products and
schemes, emphasis must be laid on publicising the concept and scope of FLCCs. There is a
demand for counselling centres but it cannot be fulfilled by just providing a physical
infrastructure. It needs to be marketed well so that people know whom to look up to for a
financial advice. There are no guidelines on possible marketing strategies in whose absence
counsellors are devising their own ways (like putting up a hoarding in front of the centre, or
creating a facebook page) which are necessary but not sufficient.
College of Agricultural Banking: Financial Literacy (FL) Workshop & Training
Background
The College of Agricultural Banking (CAB) conducted a Train the Trainers Programme – Financial Literacy
Workshop for Resource Persons of KV Sangathan20 in November 2011. This program covered 75 teachers
from all states who were then responsible for teaching teachers and students in their respective states.
Objective
The objective of this workshop was two-fold. Firstly, CAB hoped to raise the demand for financial
services as officials realised that the provision of supply alone is often insufficient to achieve Financial
Inclusion.
Secondly, CAB hoped that regional offices of banks would see the success of the workshop and replicate
it in villages. In this way, Financial Literacy training could be further imparted to housewives, students
and individuals working in the unorganized sector.
Content
The workshop was broken up into four broad modules where participants were taught:
i. The philosophy and concepts of financial inclusion & literacy
Participants were introduced to the definition and importance of Financial Inclusion. In doing so,
trainers emphasised the importance of Financial Literacy, Education and hence the workshop itself.
Participants were also briefly introduced to the concept of Financial Planning and the need to set
financial life goals in order to achieve their dreams.
A separate section covered the movement towards ICT-based Financial Inclusion using Business
Correspondents (BCs)/Business Facilitators (BFs) and Biometric system in rural banking.
ii. Functions of Reserve Bank of India (RBI)
This section covered a brief history of RBI as well as its functions as a Central Reserve Bank.
Functions covered included: Currency management; Note & Coin Production; Currency Flows;
Foreign Exchange Flows; Exchange Rate Policy; Monetary Policy as well as unique RBI functions
20
KV Sangathans are central schools with total enrolment of 10,58,450 students and 49,286 employees on roll.
such as Rural Credit. Each function was covered in minute detail. For example, under Payment
Systems, schemes such as Electronic Funds Transfer Scheme (EFTS); Real Time Gross Settlement
System and Electronic Clearing System were covered.
iii. A General Overview of Indian Banking and Financial System
Participants were introduced to the concept of the Financial System by comparison to the Human
Circulatory System. Following which, functions and key elements of a Financial System in general
were highlighted before introducing participants to India’s Financial System.
Special emphasis was placed on the Banking System. Participants were taught how to open bank
accounts and operate ATMs – knowledge that we often take for granted but which many individuals
might not have possession of. They were then taken through a list of financial services, products
(including the different types of Bank Accounts and Loans that an individual can take) and the
principles of safe banking.
Following this, participants were introduced to the concept of Investment and the channels through
which a retail investor can make investments. They were also introduced to the different Financial
Markets including the Stock, Money, Equity, Government Securities, Corporate Bond, Forex,
Commodities and Derivatives Market. Trainers also explained advanced Money Market Instruments
such as Repos, Collateralised Borrowing and Lending Obligation (CBLO) and Certificate of Deposits
(CDs).
iv. Financial Planning, savings and credit
Firstly, participants were taught the importance of prudent financial planning in meeting life goals
and/or life cycle needs. In particular, savings and compound interest were highlighted as the best
way to achieve these goals. To translate thought into action, participants were made to fill up Life
Goal Worksheets detailing the goals that they wanted to achieve. A simple Financial Calculator
Program was also offered to participants to facilitate easy financial planning.
Secondly, the concept of credit was introduced where participants were instructed upon the
relevant information that they should look out for when making a loan application. This included,
amongst others, Annual Percentage Rate (AOPR); Base Rate and Teaser Rates. Emphasis was placed
on the prudence and pitfalls of credit use.
Thirdly, participants were introduced to risk and two ways of managing it – Insurance and
Retirement Planning. For Insurance, an Insurance Decision worksheet was used to help participants
decide if they should take up Life Insurance.
Lastly, the workshop covered the avenues through which an individual could address their
grievances towards Insurance Companies and Banks. These avenues included Insurance
Ombudsman, Banking Ombudsman and Company Law Board regulation scheme.
Tailored programs for children and students
Besides the Financial Literacy Workshop itself, CAB also conducted 2 workshops tailored for children and
students.
The workshop “Banking for Kids” taught children the importance of savings and deposits using colourful
diagrams and pictures. For example, children were taken through a pictorial tour of a bank. Different
types of accounts, cheques and credit were also briefly explored.
Conversely, the workshop for students was structured around the theme of “Kaun Banega Crorepati
(Who Wants To Be A Millionaire)” and what one has to do to become a “Crorepati (Millionaire)”. In the
workshop, this involved understanding the concept of savings, compound interest, purchasing power
and inflation. To further reinforce concepts taught, students were taken through examples involving
simple math.
Challenges faced by CAB
Despite these efforts, CAB acknowledges that they continue to face significant challenges because of the
following reasons:
i. Any Financial Literacy (FL) program needs to be tailored for different target groups
ii. It is important to offer financial products along with FL
iii. It is difficult to measure FL in India as there is no proper definition of FL
In a bid to address these issues, CAB plans to build a portal/hub for Financial Literacy for organizations
to share their experiences, modules and in order to reach out to as many people as possible.
Chapter 9: Conclusions/recommendations/future research
The need and importance of financial literacy, especially for the low income population, has been
globally recognized and numerous efforts are being undertaken to provide this financial education,
primarily to low income people. This study was an effort towards identifying the programmes that are
being implemented across the country to achieve this end. There are indeed various modules of
financial literacy and the facilitators are equipped with numerous innovative ideas but there is very little
evidence of what really works in this realm.
This study, from its approach to understand the perspective of all the stakeholders (government
officials, MFIs, NGOs, other development oriented organizations and beneficiaries), identified the
challenges being faced by each of them and the ways they are trying to address those. Currently, some
of the organizations do have a comprehensive module developed but implementing it in the field is a
challenge with low levels of literacy and low ability to visualize the importance of varied financial
products in different stages of life cycle. So, this stands as a demand side issue which needs to be
addressed by devising an innovative delivery mechanism. From supply side, the concern is the way
institutions define financial literacy. For many of them, it is a very product centric approach, like an MFI
only tutors about the interest rates and customer protection and some others focus on the segments of
financial literacy relating to which they have a product to offer like pensions, insurance etc. The effect of
this methodology is promising in a way because people could then see the immediate effects of the
training and the product but it creates a negative impact as well. As most of the implementing
institutions feel, beneficiaries tend to take the other behavioural or attitudinal concepts very casually
and that is the reason why a behavioural change is rare to see as an impact of financial literacy training
programme.
While the FLT modules covered in the study are varied and in some cases comprehensive, an interaction
with beneficiaries highlight some prominent gaps. Even though, beneficiaries have started practicing
money management after the training programme, they couldn’t respond to the related questions in
the survey correctly. This might be because of a lack of required follow up with beneficiaries on this
topic. Although, the results show an improvement in beneficiaries’ numeracy levels, knowledge of
formal financial products and conceptual understanding of savings and borrowing, the percentage of
people attaining high scores is still very low. A progress on this front would require more effort and
initiative from the recipients’ side as given the monetary and logistical constraints, it is difficult to deliver
everything in all details; but the onus of motivating the beneficiaries and making them self-sufficient lies
with the implementing institutions that they are associated with.
In order to develop an effective tool for imparting financial literacy, it is very important for the
promoters of this concept to define it clearly. A possible definition of Financial Literacy could be: “A
multidimensional tool, with principle components of numeracy, money management and knowledge &
awareness of formal financial products, which inculcate financial discipline in beneficiaries and motivate
them to practice a behavior that helps them make financially sound decisions. The training programme
should be designed after a detailed need assessment of the target community. Trainers are required to
be carefully selected and rigorously trained. The training of trainers manual needs be comprehensive
but reader friendly. It should have the objectives of each session listed down clearly. The structure
should be such that the process is clearly defined with activities, stories etc. properly highlighted. Also,
considering the attention span of adults, the entire programme should be evenly spaced out across
weeks or days as the need be. Variations using innovative methods (stories, movies, one act plays etc.)
are important to postpone or eliminate the occurrence of attention break. Involving the participants in
the training programme by asking them to develop their own financial plans or by giving them small
money boxes to save money in or by explaining them ways to save money by being a little careful in
their day to day activities, would really help as it would make people understand the importance of
being a part of the respective training programme.
With respect to the ideology of organizations, it is very important that they understand the purpose of
their programme and should conduct it as their responsibility. In most of the cases, the institutions fail
to understand that having an informed clientele will be benefitting them as well. An aware community
will understand the importance of being financially included and would increase the demand of financial
products. In case of borrowing products, an informed individual will tend to improve his/ her credit
history by repaying on time and by creating a strong asset base to help in case of emergency. It is time
that a common hub of Financial Literacy is developed where different institutions could share their ideas
and experiences so that an effective universal but adaptable framework could be designed that benefits
all, helps in the improvement of cost-benefit ratio and gives a direction to this mass campaign which is
otherwise, a non-scalable effort.
Chapter 10: Appendix
A1. Participating organizations list/ Content Analysis Grid
Sr. #Schedule
Number of
SessionsHours Topics Class size Status Self product
Stories/puppets Skits Flip charts/pic cardsMovies Posters Handout Group gamesGroup discussionOther 1 Other 2 Other 3 Were incentives provided
1 APMAS Andhra Pradesh Society/ CBP Received 2 days 2 7 3.5 Pilot complete 1 1 1 1 Format is designed in a manner that is difficult to implement for facilitator
2 Trident Microfinance Private Limited Andhra Pradesh NBFC Received 4 3 0.75 Ongoing 1
3
Samhita Community Development
Services Madhya Pradesh Trust Received weekly once 5 7 1.4 25 Scaling up to different regions0 1 1 1 1 Pre and post testgroup photoHome assignmentsCertificates
4 Swadhaar FinAccess Maharashtra
Section 25
Comp/ CBP Received 5 7 1.4 1 1 1 1 1 1 1 Certificate and contest of weekBudget diary+worksheetbank accountsRs. 30 fee
5 Partners in Prosperity (Accion) Uttarakhand Society NA 4 2 0.5 20 Only for UPP 0 1 1 1 1 1 1 Song
6 PRADAN Chhattisgarh Society/ CBP Received 1 5 5 1 1 1 1
7
Indian School of Microfinance for
Women Gujarat Trust/ CBP Received NA 5 0 0 1 1 1 1 1 1 Quiz at the end of session
8 Sewa Bharat (ISMW) Delhi
Society/ CBP/
Network Received 1 day 6 7 1.2 25-30 Plan to expand to all 100 Gender Resource Centres of Government of Delhi1 1 1 1 1 1 1 Writing boardsHave counselling centres where people can go and consultLunch
9 Sewa Bank (ISMW) Gujarat
Cooperative/
MFI/ Bank Received 6 7 1.2 1 1 1 1 1 1 1
12 SKS Andhra Pradesh NBFC NA 3 days 3 3 1 15 Does it with all the groups1 1 1 1
13 Access Development Services Orissa
Society/ BL/
Network Received 2 days 2 17.4 8.7 35 Ongoing in specified region1 1 1 1 1 1 Song (prayer?), pack of cardsParticipants develop Action planCertificate
16.1 Accion International - FLT Karnataka
Section 25
Comp Received Flexible 4 2 0.5 20 Ongoing 0 1 1 1 1 1 1 Song
17 Reach India West Bengal Received Weekly during meeting 7 3.5 0.5 1 shg group roll out in progress 1 1 1 1 1 Song No incentive
18
Sanghamithra Rural Financial Services
(Accion) Karnataka
Section 25
Comp/ MFI NA Flexible 4 2 0.5 20 Unsystematic 0 1 1 1 1 1 1 Song
19 Parinaam Foundation Karnataka
Section 25
Comp Received weekly once 5 10 2 40 Pilot completed 1 1 1 1 1 1 1 Calculator, fin. Diary, money box, certificateOpening savings accountOral test, refundable deposit, home assignment
23
ESAF Microfinance and Investments
Private Limited (ISMW) Kerala NBFC Received NA 5 7 1.4 0 1 1 1 1 1 1 Quiz at the end of session
24 Sanchayan Foundation Delhi Society Received 5 10 2 0 1 1 1 1 PPTs
25 Manndeshi Mahila sah. Bank Maharashtra Cooperative Received 0 1
Organization State NatureStatus of
Module
Content matrix 4 4 3 3 2 1 1
Topics Codes Samhita APMAS Parinaam Access dev Swadhaar Reach India Manndeshi Accion FLT PiP ISMW SanchayanPradhan Trident SKS SEWA SEWA bharatESAF Sangamitra Summary NBFC/MFICBO Coop DO-MFI DO-P DO-F SHPI
Savings 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 1 1 1 1 15 2 4 3 3 1 1 1
Diff savings goals 1 1 1 1 1 1 1 1 1 1 1 1 1 1 14 2 4 3 3 1 0 1
Savings discipline 0 1 1 1 1 1 1 1 1 1 1 1 1 1 13 2 4 3 3 0 1 0
Compare savings sources 1 1 1 1 1 1 1 1 1 1 10 1 2 3 2 1 0 1
Borrowing 2 1 1 1 1 1 0 1 1 1 1 1 1 1 1 1 1 1 1 17 4 3 3 3 2 1 1
Compare credit sources 1 1 1 1 1 1 1 1 1 1 1 11 1 2 3 2 2 0 1
Importance of repayment 1 1 1 1 1 1 1 1 1 1 1 1 12 2 2 3 2 2 0 1
Qs about loan characteristics 1 1 1 1 1 1 1 1 1 1 10 2 2 2 2 1 0 1
Credit bureau 1 1 2 1 0 0 1 0 0 0
Multiple borrowing and ghost lending 1 1 1 1 1 1 1 1 8 2 2 2 2 0 0 0
Good loan or bad loan 1 1 1 1 1 1 1 1 1 1 1 1 12 2 3 3 2 1 0 1
Repayment strategy (only interest vs
principal and interest repayments) 1 1 2 1 1 0 0 0 0 0
Repayment ability 1 1 1 1 1 1 1 1 8 3 2 2 1 0 0 0
Types of formal loans 1 1 0 0 0 0 0 1 0
Banking products 3 1 0 1 0 1 0 1 0 0 1 1 0 0 0 1 1 1 0 9 1 1 3 2 1 1 0
Savings options -pros and cons 1 1 1 1 1 1 1 7 1 1 2 2 1 0 0
Savings bank account info 1 1 1 1 4 0 0 0 2 1 1 0
Savings products info 1 1 1 1 1 1 1 1 8 1 1 3 2 0 1 0
Insurance 4 1 0 0 1 0 0 0 0 0 1 1 0 0 0 1 1 1 0 7 1 2 2 0 1 1 0
Basic terms and conditions 1 1 1 1 1 1 6 1 1 2 0 1 1 0
Types 1 1 1 1 1 1 6 1 2 2 0 1 0 0
Qs to ask before taking insurance 1 1 0 0 0 0 1 0 0
Pensions 5 1 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 5 1 1 2 0 1 0 0
Budgeting and planning 6 1 0 1 1 1 0 1 1 1 1 1 0 0 0 1 1 1 1 13 2 3 3 3 1 1 0
Types of expenses: short term, long
term, unexpected, expected 1 1 1 1 1 1 1 1 1 1 1 1 12 2 3 3 3 1 0 0
Financial plan and making a balance
sheet 1 1 1 1 1 1 1 1 1 1 1 1 12 2 3 2 3 1 1 0
Needs vs Wants 1 1 1 1 1 1 1 1 1 1 10 2 3 3 2 0 0 0
Financial diary 1 1 2 0 0 0 2 0 0 0
Inflation 1 1 1 1 1 5 1 1 2 1 0 0 0
Topics Codes Samhita APMAS Parinaam Access dev Swadhaar Reach India Manndeshi Accion FLT PiP ISMW SanchayanPradhan Trident SKS SEWA SEWA bharatESAF Sangamitra Summary NBFC/MFICBO Coop DO-MFI DO-P DO-F SHPI
Life cycle of events 1 1 1 1 4 1 1 2 0 0 0 0
Planned vs unplanned life 1 1 1 1 4 1 1 2 0 0 0 0
Numeracy 7 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 2 0 0 0 2 0 0 0
Using calculator 1 1 2 0 0 0 2 0 0 0
- +,-,/,* 1 1 2 0 0 0 2 0 0 0
Using games with real money 0 0 0 0 0 0 0 0
Investments 8 0 0 0 1 0 0 0 0 0 1 1 0 0 0 1 1 1 0 6 1 2 2 0 0 1 0
Ideas for investments 0 0 0 1 0 0 0 0 0 1 1 0 0 0 1 1 1 0 6 1 2 2 0 0 1 0
Secure investment options 0 0 0 1 0 0 0 0 0 1 0 0 0 0 1 1 1 0 5 1 2 2 0 0 0 0
Identify asset vs liability/expense vs
investment 0 0 0 1 0 0 0 0 0 1 0 0 0 0 1 1 1 0 5 1 2 2 0 0 0 0
Mutual funds 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0
Share market info 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0
Interest rates 9 1 1 0 1 1 0 0 0 0 1 1 0 0 1 1 1 1 0 10 2 2 2 1 1 1 1
Simple and compound interest 1 1 0 1 0 0 0 0 0 1 0 0 0 0 1 1 1 0 7 1 2 2 0 1 0 1
Flat and reducing interest rate 0 0 0 0 1 0 0 0 0 1 0 0 0 1 1 1 1 0 6 2 1 2 1 0 0 0
Fixed Vs Floating rates 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0
Other 10 0 0 1 0 1 0 0 0 0 1 1 0 0 0 1 1 1 0 7 1 1 2 2 0 1 0
Currency recognition 1 1 2 0 0 0 2 0 0 0
Organizing documents 1 1 1 1 4 1 1 2 0 0 0 0
Credit card 1 1 0 0 0 0 0 1 0
Pan card 1 1 0 0 0 0 0 1 0
Number of stories 4 13 10 4 11 5 5 25 1 0 0 1 25 25 5
Number of games 1 1 4 1 0 6 6 4 1 0 0 1 4 4 6
Number of handouts/gifts 0 4 4 0 0 0 0 0 0 0 0 0 0 0
Session recaps Yes Yes No Yes Yes No No No No No NA No No No No No
Samhita APMAS Parinaam Access dev Swadhaar Reach India Manndeshi Accion FLT Pip ISMW SanchayanPradan Trident SKS SEWA SEWA Summary
A2. Questionnaire for Management
Study on Financial Literacy Training Programmes in India
I. Regions/ Districts covered:
II. About Module (Questions to be inserted after studying the respective module)
III. About Training Methodology
a) Who conducts the training programme with the beneficiaries?
b) How are these trainers selected/ What is their qualification?
c) How is the training of trainers conducted?
d) How is the training of beneficiaries planned (duration, location etc.)?
IV. About Participants and impact of training programme
a) Who all participated in the training programme?
b) Were the participants visited after the training programme was over to measure its impact?
c) What indicators were used to measure the impact?
d) How do you think your training programme has benefitted the participants?
e) Was the impact of training any different then what you had expected before implementing it?
How?
f) What do you think beneficiaries think about your training programme?
g) From your experience of planning and implementing the training programme, what do you think
is the best approach towards imparting Financial Literacy?
V. Future Plan
a) Are you planning to reach other areas with the same concept and module?
b) What kind of changes would you like to introduce in your present approach and module? Why?
A3. Questionnaire for Client Survey
Evaluation of Financial Literacy Training Programmes in India
Beneficiary Survey
Identification
0.1 Unique Household ID
flksjdlkfsjdlkf
0.2 Name of the training organization
.
...............................................................
0.3 State Name
................................................................
0.4 District Name
................................................................
0.5 Block Name
................................................................
0.6 Panchayat Name
................................................................
0.7 Village/ Area Name
................................................................
0.8 Landmark
.........................................................................................
.........................................................................................
0.09 Street Number/ House Number [ ] [ ] [ ]
0.10 GPS Reading North East
0.11.1 Respondent Contact
Mobile Number:
..........................................
Landline Number:
......................................
...
None/ NA -666 Skip to 0.13 -666 Skip to 0.13
Refused to Answer -777 -777
0.11.2 Does this number belong to the
Respondent?
Yes -----------------------
----------- 1
Yes ------------------
--------------1
No ------------------------
--------- 2
No -------------------
--------------2
0.12 Interviewer Name, Signature and Code
.......................................... [ ] [ ] [ ]
0.13 Name of the Respondent
..............................................
........................
0.14 Name of the Head of the Household ..............................................
........................
0.15.1 Start Time [ ] [ ] : [ ] [ ]
HR MN
0.15.2 End Time [ ] [ ] : [ ] [ ]
HR MN
0.16 Data Entry Operator Name, Signature and
Code
..............................................
............ [ ] [ ] [ ]
Introduction
Good ____________. My name is _____________. I am talking to you on behalf of Centre for
Microfinance, which is an independent research organization based in Chennai. I am here to talk to you
about any financial literacy training programmes that you attended. I will ask you some questions in this
regard. As any information you provide us will be kept confidential, your participation in this study will
not adversely affect you in any way. The results from this study however will orient future policy to
improve the lives of the rural people in India and your answers are instrumental in forming these results.
We hope that you will take part in this study. This interview will take about 15 minutes and you can stop
the interview or refuse to answer any of the questions if you want. If you have any questions about the
study or have grievances about how you were treated by our field staff, please feel free to contact our
superiors at this number 0522-4007249.
Would you like to participate in this study?
Yes
No Thank and terminate the survey
I. Training Delivery and Management
S.No. Questions Options Skips
1.01 Have you ever participated in any kind of
Financial Literacy Training Program?
1. Yes 2. No
If 2 End
1.02 Where was this training held? 1. Any participant’s house 2. Any other closed area 3. In an open area 4. No fixed location
-777 Refused to Answer
1.03 What time of the day were these held? 1. Morning 2. Afternoon 3. Evening 4. Night
-777 Refused to Answer
1.04 How many sessions were held? [ ]
-777 Refused to Answer
-999 Do Not Know
1.05 How many people attended the sessions
usually?
[ ]
-777 Refused to Answer
-999 Do Not Know
1.06 How often did you attend the training sessions? 1. As and when it was scheduled 2. Whenever possible 3. Was not very interested
-777 Refused to Answer
1.07 What was the approximate duration of each
session?
[ ] [ ] [ ] minutes
-777 Refused to Answer
-999 Do Not Know
1.08 Usually, how many people conducted a session?
[ ]
-777 Refused to Answer
-999 Do Not Know
1.09 What all was taught and discussed in these
sessions?
Interviewer Flag: Record Verbatim
1. ……………………….... 2. ………………………… 3. ………………………… 4. ………………………… 5. …………………………
1.10 What were the methods and tools used during
the training programme?
Interviewer Flag: Read all the options one by
one and circle all that apply. Ask for other
methods and tools and specify.
1. Stories/Puppets 2. Skits 3. Flip Charts 4. Movies/ other such visual aid 5. Posters 6. Handouts 7. Group Games 8. Group discussions
-888 Others, Specify
……………………………….
-777 Refused to Answer
II. Beneficiary’s Perspective
S.No. Questions Options Skips
2.01 Did you like all the training sessions? 1. Yes 2. No
-777 Refused to Answer
If 2 2.03
2.02 What did you like the most?
Interviewer Flag: Record Verbatim
2.04
2.03 Why didn’t you like them?
Interviewer Flag: Record Verbatim
What do you think about the following aspects of the training programme?
Aspect
1. Did you like
it?
1. Yes 2. No
-777 Refused
2. Would you like to
see any changes made
in it?
1. Yes 2. No
-777 Refused
If not 1 Next Row
3. What do you think should be changed?
Interviewer Flag: Record Verbatim
2.04 Topics
2.05 Materials/
Handouts/
FlipCharts etc.
2.06 Trainer
2.07 Training
Venue
2.08 Training
Timing and
Duration
2.09 Training
Methodology
2.10 Did you find the training programme useful? 1. Yes
2. No
-777 Refused to Answer
If not 1
2.12
2.11 How did you find it useful?
Interviewer Flag: Record verbatim
2.12 How will you rank the overall training programme?
1. Very Good
2. Good
3. Indifferent
4. Bad
5. Very Bad
-777 Refused to Answer
-999 Do Not Know
How comfortable were you with the following subjects before and after the training programme?
Interviewer Flag: Read aloud all the options and record one.
1. Did not know anything about it 2. Knew about it but not how to do it 3. Knew about it and how to do it but did not practice it 4. Knew about it and practiced it
-777 Refused to Answer
-999 Do Not Know
Subjects
Before After
1. Code
If not 4
3
2. How was it practiced 3. Code
If not 4
3
4. How was it practiced
2.13 Savings
2.14 Borrowing
2.15 Insurance
2.16 Numeracy
2.17 Household Budgeting
2.18 Cash Flow Management
in Business
III. Knowledge and Application
S.No. Questions Options Skips
3.01 After training, did you visit any financial
institution for the first time?
1. Yes
2. No I have visited financial institutions
before
3. No I did not visit
-777 Refused to Answer
If not 1
3.04
3.02 Which one? 1. Bank
2. Post Office
-888 Others (Specify)
…………………………….
3.03 Why did you visit this financial institution?
Interviewer Flag: Read aloud all the options.
Circle all that apply.
1. To know about the products
2. To open an account
3. To deposit money
4. To withdraw money
-888 Others (Specify)
…………………………….
3.04 What, according to you, is the safest place to
keep your savings?
Interviewer Flag: Read aloud all the options.
Circle one.
1. At Home
2. With a friend or relative
3. Bank
4. Post Office
5. LIC
6. There is no safe place
-777 Refused to Answer
-888 Others (Specify)
…………………………….
-999 Do Not Know
Think about the following imaginary situations and answer the subsequent questions to the best of your knowledge.
3.05 Ram has 7 sweets. He gave 3 to his younger
brother and 1 to his friend. How many sweets
does Ram have now?
Interviewer Flag: Do not read the options.
1. Respondent gave the correct answer
of 3
2. Respondent gave incorrect answer
-999 Do Not Know
3.06 In a sale, a shop is selling all items at half price.
Before the sale, a chair costs 300 Rupees. How
much will it cost in the sale?
Interviewer Flag: Do not read the options.
1. Respondent gave the correct answer
of Rs. 150
2. Respondent gave incorrect answer
-999 Do Not Know
3.07 If 5 people all have the winning numbers in the
lottery and the prize is 1,000 Rupees, how
much will each of them get?
Interviewer Flag: Do not read the options.
1. Respondent gave the correct answer
of Rs. 200
2. Respondent gave incorrect answer
-999 Do Not Know
3.08 Meera is a vegetable vendor. Her expenses are
more than her income. So she thinks that it is
impossible to save. What will you advise her to
change her opinion?
Interviewer Flag: Do not read the options.
Circle all that apply.
1. She should bring down her
unnecessary expenses on snacks, food
and other temptation goods that she
buys from outside.
2. She should save whatever small
amount she can on a regular basis.
3. Meera is right. It is impossible for her
to save.
-999 Do Not Know
3.09 Suppose you have Rs. 2000 to save. You can either save this in an account which earns 4% interest or repay an already existing loan of Rs. 2000 that charges 20 % interest. What will you choose to do with the 2000 rupees that you have got? Interviewer Flag: Read aloud all the options. Circle one.
1. I will save this money
2. I will repay my loan
-999 Do Not Know
3.10 Suppose you need to borrow Rs. 2000. Two
people offer you a loan. One loan requires you
pay back Rs. 2500 in one month. The second
loan also requires you pay back in one month,
Rs. 2000 plus 10 percent interest. Which loan
would you prefer?
1. One with a repayment of Rs. 2500
2. One with a repayment of 2000 plus 10
per cent interest
-999 Do Not Know
3.11 Vimla is a daily wage labourer with irregular
income. She wants to save money weekly and
draw whenever needed. What type of account
would you suggest her to open?
Interviewer Flag: Read aloud all the options. Circle one .
1. Passbook Savings Account
2. Recurring Deposit
3. Fixed Deposit
-999 Do Not Know
3.12 Ramesh does plastering on tall buildings. It is a dangerous job
and he is worried that if he gets injured his family’s income will
become inadequate to meet their needs. If Ramesh comes to
you for advice what would you suggest?
Interviewer Flag: Read aloud all the options. Circle one.
1. Take up some other
(different) work
2. Purchase health/ life/
accident insurance
3. Increase savings
-999 Do Not Know
3.13 Seeta thinks that she cannot get an account opened in a bank
because she is illiterate. Do you agree with her?
1. Yes
2. No
-777 Refused to Answer
A4. Tables of Findings for all institutions from Client Survey Following tables compare the scores achieved by respondents on each parameter (first column in blue)
with their self-reported ability to handle the financial activities associated with the parameter (blue row
below the names of the organizations). Ability is represented by alphabets: ‘a’ (did not know anything
about it), ‘b’ (knew about it but not how to do it), ‘c’ (knew about it and how to do it but did not practice
it), and ‘d’ (practiced it). First table for each parameter compares scores with ability before the training
programme and second table compares them with the ability after the training programme.
Numeracy
Money Management
a b c d a b c d a b c d a b c d a b c d a b c d
1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 0 0 1 0 0 1
2 1 1 0 0 0 0 0 0 1 0 0 0 2 1 1 2 1 1 0 0 5 3 1 2
3 9 9 0 0 2 7 6 5 10 2 1 6 7 1 1 3 7 10 1 0 35 29 9 14
TotalSwadhaarScore
Access Development APMAS Parinaam Foundation EchubeH Research
a b c d a b c d a b c d a b c d a b c d a b c d
1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 1 1
2 0 0 0 2 0 0 0 0 0 0 0 1 0 1 2 3 1 1 0 0 1 2 2 6
3 0 0 0 18 0 0 3 17 1 0 0 18 0 1 4 7 6 11 1 0 7 12 8 60
ScoreAccess Development APMAS Parinaam Foundation EchubeH Research TotalSwadhaar
a b c d a b c d a b c d a b c d a b c d a b c d
0 0 2 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 1 2 0 0
1 5 3 1 0 0 1 2 0 0 0 0 0 4 0 2 0 2 5 0 0 11 9 5 0
2 2 5 1 0 3 1 11 2 5 5 1 7 5 0 2 1 4 2 3 4 19 13 18 14
3 0 1 0 0 0 0 0 0 0 0 1 1 3 0 2 0 0 0 0 0 3 1 3 1
TotalSwadhaarScore
Access Development APMAS Parinaam Foundation EchubeH Research
a b c d a b c d a b c d a b c d a b c d a b c d
0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 1 2
1 0 0 0 9 0 0 1 2 0 0 0 0 0 0 0 6 2 4 1 0 2 4 2 17
2 0 0 0 8 1 0 5 11 1 1 0 16 0 0 1 7 0 2 1 10 2 3 7 52
3 0 0 0 1 0 0 0 0 0 0 0 2 0 0 0 5 0 0 0 0 0 0 0 8
TotalScore
Access Development APMAS Parinaam Foundation Swadhaar EchubeH Research
Understanding of Interest Rates
Knowledge of Financial Products and Best Practices
Savings
Insurance
a b c d a b c d a b c d a b c d a b c d a b c d
0 4 6 0 1 0 1 1 1 2 4 0 0 9 1 3 1 1 3 0 0 16 15 4 3
1 2 7 0 0 1 6 1 9 7 2 1 4 5 0 1 0 3 8 4 1 18 23 7 14
ScoreAccess Development APMAS Parinaam Foundation Swadhaar EchubeH Research Total
a b c d a b c d a b c d a b c d a b c d a b c d
0 0 0 0 11 0 0 0 3 0 0 0 6 1 1 10 2 1 3 0 0 2 4 10 22
1 0 0 0 9 0 1 0 16 0 0 0 14 0 1 4 1 1 7 2 6 1 9 6 46
TotalScore
Access Development APMAS Parinaam Foundation Swadhaar EchubeH Research
a b c d a b c d a b c d a b c d a b c d a b c d
0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0 1 1 0 1 2 1 1 1
1 0 5 0 1 2 4 0 2 2 2 1 1 7 5 1 0 3 6 3 4 14 22 5 8
2 1 11 1 1 0 2 1 9 2 8 1 2 3 2 1 0 0 1 0 0 6 24 4 12
ScoreAccess Development APMAS Parinaam Foundation Swadhaar EchubeH Research Total
a b c d a b c d a b c d a b c d a b c d a b c d
0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 1 1 1 0 3
1 0 0 0 6 0 0 0 8 0 0 0 6 0 0 1 12 2 4 1 9 2 4 2 41
2 0 0 0 14 0 0 0 12 0 0 0 13 0 0 0 6 0 0 0 1 0 0 0 46
TotalScore
Access Development APMAS Parinaam Foundation Swadhaar EchubeH Research
a b c d a b c d a b c d a b c d a b c d a b c d
0 2 3 1 0 1 1 2 1 3 2 0 0 3 2 0 0 2 6 0 0 11 14 3 1
1 4 10 0 0 5 3 2 5 6 4 2 3 6 2 2 5 3 4 3 2 24 23 9 15
ScoreAccess Development APMAS Parinaam Foundation Swadhaar EchubeH Research Total
a b c d a b c d a b c d a b c d a b c d a b c d
0 0 0 0 6 0 0 0 5 1 0 2 2 0 1 4 0 2 6 0 0 3 7 6 13
1 0 0 0 14 0 1 2 12 1 2 2 10 0 0 7 8 2 2 5 3 3 5 16 47
TotalScore
Access Development APMAS Parinaam Foundation Swadhaar EchubeH Research
A5. Questionnaire for Youth Survey
Evaluation of Financial Literacy Training Programmes in India
Beneficiary Survey
Identification
0.1 Unique Household ID
flksjdlkfsjdlkf
0.2 Name of the training organization
.
...............................................................
0.3 State Name
................................................................
0.4 District Name
................................................................
0.5 Block Name
................................................................
0.6 Panchayat Name
................................................................
0.7 Village/ Area Name
................................................................
0.8 Landmark
.........................................................................................
.........................................................................................
0.09 Street Number/ House Number
[ ] [ ] [ ]
0.10 GPS Reading North East
0.11.1 Respondent Contact
Mobile Number:
..........................................
Landline Number:
......................................
...
None/ NA -666 Skip to 0.13 -666 Skip to 0.13
Refused to Answer -777 -777
0.11.2 Does this number belong to the
Respondent?
Yes -----------------------
----------- 1
Yes ------------------
--------------1
No ------------------------
--------- 2
No -------------------
--------------2
0.12 Interviewer Name, Signature and Code
.......................................... [ ] [ ] [ ]
0.13 Name of the Respondent
..............................................
........................
0.14 Name of the Head of the Household ..............................................
........................
0.15.1 Start Time [ ] [ ] : [ ] [ ]
HR MN
0.15.2 End Time [ ] [ ] : [ ] [ ]
HR MN
0.16 Data Entry Operator Name, Signature and
Code
..............................................
............ [ ] [ ] [ ]
Introduction
Good ____________. My name is _____________. I am talking to you on behalf of Centre for
Microfinance, which is an independent research organization based in Chennai. I am here to talk to you
about any financial literacy training programmes that you attended. I will ask you some questions in this
regard. As any information you provide us will be kept confidential, your participation in this study will
not adversely affect you in any way. The results from this study however will orient future policy to
improve the lives of the rural people in India and your answers are instrumental in forming these results.
We hope that you will take part in this study. This interview will take about 15 minutes and you can stop
the interview or refuse to answer any of the questions if you want. If you have any questions about the
study or have grievances about how you were treated by our field staff, please feel free to contact our
superiors at this number 0522-4007249.
Would you like to participate in this study?
Yes
No Thank and terminate the survey
I. Training Delivery and Management
S.No. Questions Options Skips
1.01 Have you ever participated in any kind of
Financial Literacy Training Program?
3. Yes 4. No
If 2 End
1.02 Where was this training held? 5. Any participant’s house 6. In school/ NGO premises 7. Any other closed area 8. In an open area 9. No fixed location
-777 Refused to Answer
1.03 What time of the day were these held? 5. Morning 6. Afternoon 7. Evening 8. Night
-777 Refused to Answer
1.04 How many sessions were held? [ ]
-777 Refused to Answer
-999 Do Not Know
1.05 How many people attended the sessions
usually?
[ ]
-777 Refused to Answer
-999 Do Not Know
1.06 How often did you attend the training sessions? 4. As and when it was scheduled 5. Whenever possible 6. Was not very interested
-777 Refused to Answer
1.07 What was the approximate duration of each
session?
[ ] [ ] [ ] minutes
-777 Refused to Answer
-999 Do Not Know
1.08 Usually, how many people conducted a session?
[ ]
-777 Refused to Answer
-999 Do Not Know
1.09 What all was taught and discussed in these
sessions?
Interviewer Flag: Record Verbatim
6. ……………………….... 7. ………………………… 8. ………………………… 9. ………………………… 10. …………………………
1.10 What were the methods and tools used during
the training programme?
Interviewer Flag: Read all the options one by
one and circle all that apply. Ask for other
methods and tools and specify.
9. Stories/Puppets 10. Skits 11. Flip Charts 12. Movies/ other such visual aid 13. Posters 14. Handouts 15. Group Games 16. Group discussions
-888 Others, Specify
……………………………….
-777 Refused to Answer
II. Beneficiary’s Perspective
S.No. Questions Options Skips
2.01 Did you like all the training sessions? 3. Yes 4. No
-777 Refused to Answer
If 2 2.03
2.02 What did you like the most?
Interviewer Flag: Record Verbatim
2.04
2.03 Why didn’t you like them?
Interviewer Flag: Record Verbatim
What do you think about the following aspects of the training programme?
Aspect
1. Did you like
it?
3. Yes 4. No
-777 Refused
2. Would you like to
see any changes made
in it?
3. Yes 4. No
-777 Refused
If not 1 Next Row
3. What do you think should be changed?
Interviewer Flag: Record Verbatim
2.04 Topics
2.05 Materials/
Handouts/
FlipCharts etc.
2.06 Trainer
2.07 Training
Venue
2.08 Training
Timing and
Duration
2.09 Training
Methodology
2.10 Did you find the training programme useful? 3. Yes
4. No
-777 Refused to Answer
If not 1
2.12
2.11 How did you find it useful?
Interviewer Flag: Record verbatim
2.12 How will you rank the overall training programme?
6. Very Good
7. Good
8. Indifferent
9. Bad
10. Very Bad
-777 Refused to Answer
-999 Do Not Know
How comfortable were you with the following subjects before and after the training programme?
Interviewer Flag: Read aloud all the options and record one.
5. Did not know anything about it 6. Knew about it but not how to do it 7. Knew about it and how to do it but did not practice it 8. Knew about it and practiced it
-777 Refused to Answer
-999 Do Not Know
Subjects
Before After
1. Code
If not 4
3
2. How was it practiced 3. Code
If not 4
3
4. How was it practiced
2.13 Savings
2.14 Borrowing
2.15 Insurance
2.16 Numeracy
2.17 Household Budgeting
2.18 Cash Flow Management
in Business
III. Knowledge and Application
S.No. Questions Options Skips
3.01 Kapil is a furniture salesperson at a large
furniture store. He receives a monthly base
salary of Rs. 20,000 plus a ten-percent
commission on his sales. Last week there was a
sale at the store. Kapil’s sales for the weekend
brought his monthly total to Rs. 50,000. Kapil
wants to estimate his pay for the month. What
is the estimate?
1. Respondent gave the correct answer
of Rs. 25,000
2. Respondent gave a wrong answer
-999 Do not Know
3.02 Abhishek and Namita are the same age. At age
25 Namita began saving Rs. 1,00,000 a year
while Abhishek saved nothing. At age 50,
Abhishek realized that he needed money for
retirement and started saving Rs. 2,00,000 per
year while Namita kept saving her Rs. 1,00,000.
Now they are both 75 years old. Who has the
most money in his or her retirement account?
Interviewer Flag: Don’t read out the
options. Circle one.
1. They would each have the same amount because they put away exactly the same
2. Abhishek, because he saved more each year
3. Namita, because she has put away more money
4. Namita, because her money has grown for a longer time at compound interest
3.03 If each of the following persons had the same
amount of take home pay, who would need the
greatest amount of life insurance?
Interviewer Flag: Read aloud all the
1. An elderly retired man, with a wife who is also retired.
2. A young married man without children.
3. A young single woman with two
options. Circle one.
young children.
4. A young single woman without children.
3.04 Imagine that the interest rate on your savings
account was 1 percent per year and inflation
was 2 percent per year. After one year, would
you be able to buy more than, exactly the same
as, or less than today with the money in this
account?
1. More than today
2. Exactly the same as today
3. Less than today
-999 Do not know
Following are some attitude and behavior statements (3.05-3.12). Please use a scale of 1 to 5 and circle the
number on it to show how much you agree or disagree that each of the statements applies to you, personally.
1 implies that you completely agree that the statement describes you and 5 shows that you completely
disagree:
Statements
Scale
3.05 Before I buy something I carefully consider
whether I can afford it. 1 2 3 4 5
3.06 I tend to live for today and let tomorrow
take care of itself. 1 2 3 4 5
3.07 I find it more satisfying to spend money
than to save it for the long term. 1 2 3 4 5
3.08 I pay my bills on time. 1 2 3 4 5
3.09 I am prepared to risk some of my own
money when saving or making an
investment.
1 2 3 4 5
3.10 I keep a close personal watch on my
financial affairs. 1 2 3 4 5
3.11 I set long term financial goals and strive to
achieve them. 1 2 3 4 5
3.12 I make a budget every month and follow it. 1 2 3 4 5
S.No.
Questions
Options
Skips
3.13 If Neha has put aside money for emergencies,
in which of the following forms would it be of
LEAST benefit to her if she needed it right
away?
Interviewer Flag: Read aloud all the
options. Circle one.
1. Invested in a down payment on the house.
2. Stocks.
3. Savings account.
-999 Do not Know
3.14 If you had a savings account at a bank, which of
the following would be correct concerning the
interest that you would earn on this account?
Interviewer Flag: Read aloud all the
options. Circle all that apply.
1. Earnings from savings account interest may not be taxed.
2. Income tax may be charged on the interest if your income is high enough.
3. Sales tax may be charged on the interest that you earn.
4. You cannot earn interest until you pass your 18th birthday.
What do you think about the following statements (3.15-3.18). Circle true (T) or false (F) for each of them.
Statement Response
3.15 An investment with a high return is likely to be high risk. T F -999
3.16 High inflation means that the cost of living is increasing rapidly. T F -999
3.17 It is less likely that you will lose all of your money if you save it in more than
one place. T F -999
3.18 Buying a single company stock usually provides a safer return than a stock
mutual fund T F -999
You found your first job working at Mc Donald’s. You are being paid on an hourly basis at the rate of Rs. 250 and you
have been contracted to work for 20 hours per week. You are paid every two weeks. As per your contract, whenever
paid, the company will withhold 2% of your pay in income tax, 1% in Provident Fund and Rs. 1,000 towards insurance
every 3 months. Answer the following questions (3.19-3.23):
3.19 What is your gross income for two weeks? 1. Respondent gave the correct answer
of Rs. 10,000
2. Respondent gave a wrong answer
-999 Do not Know
3.20 How much do you pay in income tax each time
you are paid?
1. Respondent gave the correct answer
of Rs. 200
2. Respondent gave a wrong answer
-999 Do not Know
3.21 What is your net income each pay period (2
weeks)?
1. Respondent gave the correct answer
of Rs. 9,700
2. Respondent gave a wrong answer
-999 Do not Know
3.22 At the end of 12 weeks, how much net income
will you earn?
1. Respondent gave the correct answer
of Rs. 57,200
2. Respondent gave a wrong answer
-999 Do not Know
3.23 How much income tax will you have paid by
the end of 12 weeks?
1. Respondent gave the correct answer
of Rs. 1,200
2. Respondent gave a wrong answer
-999 Do not Know
A6. Category wise Tables of findings from Youth Survey
Numeracy
Adjacent table depicts the total
scores on numeracy received by the
percentage of respondents
associated with each academic
institution.
Figures below (Graph 1 and 2) graphically compare the numeracy scores attained by different groups
(based on gender and academic institution).
Money Management Behaviour
Tables below give the percentage of youth that exhibit a good or poor money management behaviour.
First column in both the tables lists the number of practices (out of 8) for which the corresponding rows
and columns give the percentage of youth demonstrating a good or poor money management
behaviour.
Graph 1 Graph 2
Practices College Govt. NGO Pvt. Total
0 2.78 2.78 0.00 0.00 5.56
1 16.67 5.56 0.00 13.89 36.11
2 8.33 0.00 16.67 8.33 33.33
3 2.78 5.56 5.56 5.56 19.44
4 0.00 2.78 0.00 0.00 2.78
5 0.00 0.00 2.78 0.00 2.78
Poor Money Management Behaviour
Male Female Male Female Male Female Male Female
0 0.00 9.09 0.00 0.00 0.00 0.00 0.00 0.00
1 0.00 45.45 16.67 0.00 0.00 22.22 10.00 40.00
2 0.00 27.27 33.33 33.33 0.00 77.78 10.00 40.00
3 9.09 9.09 16.67 0.00 0.00 0.00 0.00 0.00
Total 9.09 90.91 66.67 33.33 0.00 100.00 20.00 80.00
ScoreCollege (11) Govt. School (6) NGO (9) Pvt. School (10)
0.5
11
.52
me
an o
f sco
re_
num
era
cy
College Government School NGO Private School
01
23
me
an o
f sco
re_
num
era
cy
College Government School NGO Private School
Male Female Male Female Male Female Male Female
Practices College Govt. NGO Pvt. Total
2 2.78 2.78 0.00 0.00 5.56
3 2.78 5.56 8.33 2.78 19.44
4 8.33 5.56 13.89 16.67 44.44
5 11.11 2.78 2.78 5.56 22.22
6 5.56 0.00 0.00 2.78 8.33
Good Money Management Behaviour
Understanding of Financial Concepts
Application of Financial Concepts
Following table gives the percentage of youth associated with each institution receiving a particular
score on application of financial concepts.
Score College Govt. NGO Pvt. Total
0 0.00 50.00 11.11 0.00 11.11
1 54.55 0.00 77.78 10.00 38.89
2 27.27 50.00 0.00 40.00 27.78
3 18.18 0.00 11.11 50.00 22.22
4 0.00 0.00 0.00 0.00 0.00
Total 100.00 100.00 100.00 100.00 100.00
Understanding of Financial Concepts
Score College Govt. NGO Pvt. Total
0 0.00 16.67 11.11 0.00 5.56
1 27.27 16.67 0.00 0.00 11.11
2 18.18 16.67 11.11 10.00 13.89
3 9.09 0.00 0.00 40.00 13.89
4 18.18 16.67 0.00 30.00 16.67
5 27.27 33.33 77.78 20.00 38.89
Total 100.00 100.00 100.00 100.00 100.00
Application of Financial Concepts
A7. Measuring Financial Literacy: A Pan India Sample Survey The case of little response from the target population towards both the conventional and innovative
financial products in rural areas has received a lot of global attention. Literacy levels and more
importantly the lack of financial awareness have been held responsible for this phenomenon. And in
order to address this issue, numerous financial literacy training programmes have been designed, tested
and implemented using various methods and technological setups. Significant amount of research has
also been done to evaluate the effectiveness of these training programmes but their contrasting and
inconclusive results are hardly of any use to the policymakers. All this muddled up landscape of financial
literacy can be attributed to the lack of a universal definition of the term that makes it difficult to tag an
individual as “Financially Literate”. Although the need and importance of financial education has been
globally realized, there exists no benchmark to measure the success of efforts that are put in to achieve
it.
Each of the implementing agencies that are working in this realm of financial literacy develops the
training programme as per its own customized definition of the concept. Some focus on savings and
financial planning, others on numeracy along with these two and still others add banking and best
borrowing practices to the list. Customization is required but it ought to be done as per the actual need
of the target community and not according to implementer’s perception about it.
Clubbing all the assumed essential components together, CMF, as part of another study, attempted to
develop a tool to measure the perceived financial knowledge & capability and comfort with basic
formal financial services (financial literacy) of 397 people across nine states of the country.
Sample
Respondents were randomly selected from rural/ urban areas of each
state. In all, 37 per cent of the sample was rural in nature. 49.12 per cent
of the respondents were females and 90.15 per cent of the respondents
had not received any formal or informal training on Financial Literacy till
the date of interview.
Data Collection Instrument
Data was collected using a short questionnaire that first required the respondents to rate their financial
knowledge and financial capability as per their own perception. They were then given some hypothetical
situations to check if they do some necessary financial planning and to test their actual levels of
understanding of financial concepts and products. The scenarios varied from simple to complex
problems to gauge the exact degree of complexity that they can tackle with their current state of
awareness.
Findings
Results from the data collected have been presented in the following seven sections.
Rural Urban
Bihar Andhra Pradesh
Karnataka Gujarat
Orissa Maharashtra
Uttar Pradesh Tamil Nadu
West Bengal
1. Perceived Financial Knowledge
As the graph 1 depicts, people in Maharashtra, Tamil
Nadu, Gujarat and Orissa rate their knowledge of
credit options in the neighbourhood the highest.
People in rural Karnataka report that they know very
little insurance and banking products, credit options
available to them and do not know at all about the
complex financial terms like equity investment.
Overall, people think that they are aware of the
credit options available to them. So, with this
information in hand, if an organization were to
develop a training programme, they should be
concentrating more on making people aware about the insurance products and should rush through the
information on credit options and banking products. The programme should be designed in a manner
that it focuses more on some aspects in some parts of some states as per the need assessment that can
be done this way.
2. Perceived Financial Capability
Graph 2 shows that people from Tamil Nadu who
were interviewed are most confident about their
financial capability. Across all the states people are
not very confident about their ability to manage the
unexpected financial shocks so the need is to
counsel them on the aspect of preparing for future
or saving for emergency and likewise, people who
are not confident about their family’s financial
stability should be guided on money management
principles.
3. Numeracy
People’s numeracy skills were tested using three different
questions one each on: percentages, division and
subtraction. Those who gave the correct answer to the
question were awarded a score of (+1), those who did not
know the answer were given a (0) and those who gave a
wrong answer were penalised with a score of (-1). Table 3 tabulates the percentage of sample that
obtained different scores on the questions asked. As can be seen, people are more comfortable
answering question on subtraction. 97.48% gave the correct answer to it. As the difficulty level
increased, the percentage of people giving correct responses decreased and it decreased drastically for
02
46
8
AP Bih Guj Karnat Maha Orissa TN UP WB
mean of Insurance mean of Investment
mean of Credit mean of Products
02
46
8
AP Bih Guj Karnat Maha Orissa TN UP WB
mean of Financial_Stability mean of Managing_Shock
mean of Aspirations
-1 0 1
Percentages 44.58 46.85 8.56
Division 4.28 4.28 91.44
Subtraction 1.76 0.76 97.48
NumeracyScores
question on percentages (only 8.56% of
respondents gave a correct answer). Further,
chart 3 depicts the variation in the total score on
numeracy based on gender and location (rural or
urban) of the interviewees. Rural males have
performed better than their female counterparts
with a larger percentage of the former scoring
atleast (+2). However, percentage of rural males
scoring (0) and less than that is a little more than
the percentage of rural females scoring in that
range. In case of urban areas, the results are
opposite with a larger percentage of female respondents scoring equal to or more than (+2). Also, the
percentage of urban males, scoring a (0) or less is negligible as opposed to urban females for whom the
percentage of respondents scoring 0 or less is more than the remaining three segments of people.
4. Calculation and Understanding of Interest Rates
Being able to calculate or at least understand interest rates is very important in the complex financial
landscape. Considering this, people were given two questions: one in which they had to choose one of
the two borrowing products that had their interest rates differently defined; second question aimed at
testing their ability to understand the concept
of reducing purchasing power with increasing
inflation. Table 4 tabulates the percentage of
people who could respond to these questions
correctly and score a (+1), those who did not
know the answer to these questions (0) and
percentage of those who gave a wrong
answer and scored a (-1). As the table shows,
approximately 56 per cent of people
understand the interest rates and can
compare different scenarios based on just this
parameter. Chart 4 presents more detailed
information about the scores received by
people belonging to different categories (rural
or urban and male or female). Percentage of
respondents receiving a score of (+2) is
highest among rural males (51.4%). Most of
the urban sample has scored either answered
only one of the two questions correctly or has not answered any of the two questions. Percentage of
people obtaining a negative score is highest for urban females (22.4%).
0.03.21.64.0 38.4 48.8 4.0
0.00.00.00.8 64.8 24.0 10.4
0.00.01.35.2 41.6 48.1 3.9
1.40.01.44.3 35.7 38.6 18.6
0 20 40 60 80 100percent
Urban
Rural
Female
Male
Female
Male
-3 -2
-1 0
+1 +2
+3
-1 0 1
Comparing Loans 39.29 3.53 57.18
Purchasing Power 25.69 19.4 54.91
Interest RatesScores
11.2 11.2 44.0 14.4 19.2
7.2 9.6 44.8 9.6 28.8
9.1 10.4 33.8 7.8 39.0
8.6 4.3 24.3 11.4 51.4
0 20 40 60 80 100percent
Urban
Rural
Female
Male
Female
Male
Score:(-2) Score:(-1)
Score:(0) Score:(+1)
Score:(+2)
5. Understanding Financial Products
Respondents were asked three questions to
judge their levels of understanding on the
Insurance (need), Investment (concept) and
Savings (awareness) products. Data collected
shows that 59.70 per cent people understand the
need of insurance product and only 19.90 per
cent of the respondents understand the concept
of ‘not storing all your eggs in one basket’
(investment). Most unfortunate finding was the
percentage of people who are aware about the
interest rate that one gets on a passbook savings
bank account. Only 1 out of 397 respondents
(0.25%) gave the correct answer, 66.25% did not know the answer and approximately 9 per cent said
that it was more than 7%. The chart 5 shows the gender based variation in the understanding of
financial products across rural and urban areas. None of the respondents could answer all the questions
correctly. Urban males have performed the best as 75.2% of them have scored atleast 1 point. Both
rural and urban females have scored better than rural males with 42.9% of rural males scoring zero out
of a maximum of three points that they could obtain.
6. Handling Financial Shocks
When asked for the ways people would combat a sudden financial shock, majority of them
(approximately 27%) said that they would use their savings for the purpose, proportion being same for
rural and urban respondents. The second most important source of funds for people in rural areas is a
loan from relatives or friends and a loan from money lenders for urban sample. Approximately 10 per
cent people, in both rural and urban areas, would borrow from banks and a meagre 6 per cent would
sell their assets in such a situation of financial loss. 5 %, all of them being rural inhabitants expect to get
a loan from an MFI or SHG in case of a crisis.
7. Financial Planning
To test if respondents and their households have
planned for their future, they were asked if they have
planned for their retirement, if they have more savings
than loans, if they have their lives insured and if they
plan their expenses. Data collected shows that only 13
per cent of the respondents have planned for their
retirement with majority of them residing in urban
areas. 54% to 58% of the respondents do the other
three mentioned ways of financial planning. Graph 7
was drawn from the scores (ranging from 0 to 4) that
interviewees received based on their responses. It shows the variation across states on the extent to
which people plan for the expected or unexpected financial expenses in future. As can be depicted from
0.5
11
.52
2.5
me
an
of fina
ncia
l_pla
nnin
g
AP Bih Guj Karnat Maha Orissa TN UP WB
31.2 56.8 12.0 0.0
24.8 59.2 16.0 0.0
40.3 48.1 11.7 0.0
42.9 47.1 10.00.0
0 20 40 60 80 100percent
Urban
Rural
Female
Male
Female
Male
mean of score_0 mean of score_1
mean of score_2 mean of score_3
it, the mean score for none of the states is higher than 2.5 points (mean for Maharashtra) which clearly
shows a lack of good financial planning. Respondents from the states of Gujarat (urban), Karnataka
(rural) and Orissa (rural) perform the worst on planning with the state means being approximately equal
to 1 point. People in urban areas seem to plan more as compared to those residing in rural areas.
Among the states from which rural respondents were chosen, Uttar Pradesh has obtained the highest
mean score.
The choice of parameters or questions that have been used to measure the levels of financial literacy
among people can be questioned and argued upon. The objective of the study was to include all the
diverse aspects that various implementers think are important. This was an attempt to highlight the
need for a universal definition and the need of customized programmes as per the requirement of the
target community.
Given this level of variation, need of the sector is to clearly define financial literacy, at least the goals of
such a programme so that it can be designed effectively. After this is done, the onus lies with the
implementing agencies to categorize the target community based on the need assessment exercise that
they ought to conduct (may be similar to the one mentioned above) and then design and provide the
required customized intervention.