Workshop on Financial Literacy IIMA

Workshop in Progress

I was in IIM Ahmedabad in July to attend a workshop on "Designing Financial Literacy Programs" which was organized by Prof. Baruah and Shobhesh Agarwala. I was pretty much impressed by the design of the workshop and the way it was conducted. The research that was carried out by IIMA on designing effective intervention tools for FL shows that a combination of training plus videos proved to be most effective as far as retention is concerned. Being financially literate requires not only knowledge of the concept but also use of various financial instruments leading to inculcation of the desired habits which in turn leads to attitudinal change in the long run. One of the presenters in the workshop "Tamol Bandhopadhyay," "Executive Editor Live Mint," Mumbai did drive home a crucial point: he mentioned that we are generally wrong in thinking that individuals living below the poverty line lack knowledge of FL. That is one of those "partial truths which begets total errors." He gave an example of his driver whose home he once happened to visit and was amazed to find that he saved money that he earned from different types of work such as salary, money for taking the dog for a walk, extra money for over time etc. into different containers with different labels such as health, education, general expenses etc. He sent money back home located in far away Nepal from these savings. Tamol took the first step by bringing his driver within the formal banking system by opening two recurring deposit accounts for him with the State Bank of India, which he still maintains.

IIMA

We as part of the DE intervention in Odisha are rolling out a pilot FL program in all the 100 government schools spread across 6 districts and Tamol's point will always be a guiding statement for me. Whether it is adults or children all of us are pretty much aware of the concepts of earning, saving, spending, budgeting, investment etc. (which comprise the core of FL ) and make use of them in some rudimentary form as part of their day to day lives. The only problem being that most of the sophisticated concepts that we use to describe the same cannot capture these rudimentary forms of the same. We need to take cognizance of this fact while designing our FL interventions.