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This document consists of the definition of financial literacy, problems and challenges in implementation of the financial literacy, curriculum, why it’s a crucial part of financial inclusion. Moreover, It will explain the methodology to implement the curriculum among underprivileged people. By: Arham Jain (IDEX Fellow Alumni '14) Published with permission by IDEX Accelerator & Global Fellows
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Financial Literacy Curriculum Arham Partap Jain, Founder Apeejay Micro
Financial Services
This document consists of the definition of financial literacy, problems and challenges in
implementation of the financial literacy, curriculum, why it’s a crucial part of financial inclusion.
Moreover, It will explain the methodology to implement the curriculum among underprivileged
people.
11/30/2014
Apeejay Micro Financial Services is an Non-Government Organization (NGO) established in
March , 2014 which focuses on the social inclusion , financial literacy and financial inclusion of
the people who are at the base of the pyramid by using technology.
SOCIAL INCLUSION
Social inclusion is central to ending extreme poverty and fostering shared prosperity.
It is both an outcome and a process of improving the terms on which people take part in
society. Our Objective is to provide Proof of Identity (PoI) / Proof of Residence (PoR) to the homeless
people, people with disabilities, beggars, rag-pickers, migrants, drug addicts, domestic workers,
widows, sex-workers, transgender etc. These people don't have any identity / residence proof
which disable them to basic rights of the citizen of the country. They are denied the opportunity
to lead a life of dignified existence.
Our Methodology We will help the above mentioned people in getting Aadhar Card by acting as ' Introducers' to the UIDAI (Unique Identification Authority of India). We can also act as Regulators or Undertaking agencies to UIDAI. We will also be associating and collaborating with the NGOs and SHGs (Self Help Group) who are working the poor/ marginalized group. Aadhar Card will bring them under a cover of Social Security. It is the first step in the development of these people. Once these people will be issued Aadhar Card. They will be eligible for the government aided schemes such as MNREGA etc. and subsidies. Moreover, these people will be able to open bank accounts through their Aadhar cards. Inclusion of the marginalized helps residents get identity recognizes his/her existence and helps the state in reaching out to the resident for delivery of various welfare programs. FINANCIAL LITERACY
Most of underprivileged people do not the value the importance of compounding. They don’t
know how crucial can it is to save money. These are illiterate people who don’t know how to fill
up bank slips, withdrawing and depositing money and other paperwork. Most banks/post-
offices don’t treat poor people with respect or priority like they do with regular customers and
sometimes they manipulate them by saying that they can’t open bank account because of lack
of documents.
Our Methodology We will provide financial literacy curriculum to different communities. We will not only educate these community people but also we will empower them. We will motivate and teach them to implement this financial literacy curriculum in their respective communities and make some money out of it. FINANCIAL INCLUSION
Financial Inclusion is the process of ensuring access to appropriate financial products and
services needed by all sections of the society in general and vulnerable groups such as weaker
sections and low income groups in particular at an in a fair and transparent affordable cost
manner by mainstream institutional players
We will help underprivileged people to get bank accounts. We will open poor people bank
accounts on the basis of their Aadhar Card. Reserve bank of India has approved that just an
Aadhar Card will fulfill the Know Your Customer (KYC) norms and will be sufficient to open a
bank account.
We will be opening Small Bank Account (RBI Circular :RBI /2010-11/487 RPCD.CO.RCB.AML.BC. No.63/07.40.00/ 2010-11). To open Small account the documents required are either Aadhar card or NREGA job card. This Small Account will act as BSBDA (Basic Saving Bank Deposit Account) ( RBI Circular : RBI/2013-14/355 UBD.BPD.(PCB).Cir.No. 35/13.01.000/2013-14) where a customer does not have to maintain a minimum balance. Our Methodology We will act as Corporate Business Correspondent to both Public and Private Banks of the
country. We will further hire BCA (Business Correspondent Agents) who can operate different
CSPs (Customer Service Points) I different unbanked and under-banked locations.
We will act as the bank representatives who will help bank in following ways:-
It will help banks in reducing their huge cost of infrastructure, salaries etc.
It will help villagers to open bank accounts.
It will teach villagers about the benefits of having a bank account
It will help villagers in banking transactions. (Deposit money, take money out of savings
account, loans etc.)
It is the cheap and effective alternative to bank branches.
It will empower people and open employment opportunities for them.
We will be using Biometric Micro ATM device to open bank account in both villages and slum
areas. Biometric Micro ATMs will allow customers to perform basic financial transactions using
only their AADHAAR number and their fingerprint as identity proof (along with a Bank
Identification Number for inter-bank transactions).Micro-ATMs will support functions like
deposits, withdrawals, fund transfers and balance enquiries.
Once the bank account is opened in different communities .We will choose a leader from the
respective communities who can collect and distribute the money to our customers on daily
basis and put it into the drop boxes placed there using the biometric Micro ATM. We will collect
the money from the drop box every week or two and submit it to the bank. The leader we
select will be somebody who is popular with the locals or may be the President (Pradhan ) of
the slum area . We will constantly monitor his/her activities. These leaders will be trained with
basic accounting skills and banking skills. Moreover, they will be given training regarding the
usage of Biometric Micro ATM device. This approach will help to empower the people living in
the slum areas and villages. It will also provide employment to the people who will help us in
our operation. Moreover, it will help us to gain the trust of the people living in those
communities.
We will be using mobile vans to go to different slum areas and villages. It will help us to swiftly
and easily open the bank account.
In future we are planning to use voice based biometric devices which will enable to open bank
account and do transaction on the basis of the voice. This will help us to reach different remote
areas of our country where language is the main barrier. Moreover, this device will eliminate
the cost of the local man.
SOME FACTS ABOUT INDIA
Geographical area- 7th in the
world
Population 2nd in the World -
1.35 Billion
One of the fastest growing
economies
36 States and Union Territories,
644 Districts
640 thousand Villages, widely
dispersed terrains
Multilingual and Multiethnic
Society
EXCLUSION SURVEY
Highest number of households (145 million) excluded from banking
Only 30000 villages have commercial bank branch
Only 17% of population has any credit
Only 34% of the population engaged in formal banking
50% of the population does not have bank account
Only 10% have life insurance cover
Just 9.6% have any non-life insurance
Why Financial Literacy is important? What problems it will be able to
tackle?
Problem faced by banks
India has 640,000 villages. Banks do not have their branches in every village.
They cannot establish branches in every village because administrative cost will be very
high i.e. infrastructure cost, telephone, electricity, staff salary, security guards.
The maintenance cost of individual bank account will be very high as compared to the
amount of money deposited, loans taken.
Banks have to bear heavy losses.
Most of the villages have no electricity, good schools therefore staff will be reluctant to
move there irrespective of the salary.
Problem faced by People
People living in village have to travel long distance for basic banking activities such as
cash deposit, cash withdrawal.
Most of the people living in villages are illiterate so they don’t know how to fill up bank
slips, other paperwork. They need to ask for help here and there in the bank office
. which will be difficult for them to manage
Most banks/post-offices don’t treat poor people with respect or priority like they do
with regular customers.
If Villagers did not get facility of banking / insurance then they had to rely on the money
lender who charged whatever interest rate he wanted to.
Problem faced by Government
They are not able to provide subsidies to the underprivileged people because most of
the people do not have any bank account.
They are not able to provide salaries of people who are registered under NREGA
scheme.
FINANCIAL LITERACY CURRICULUM
Financial literacy is very important aspect in social and financial inclusion. It is necessary for the
people who are at the bottom of the pyramid to know about the value of compounding. They
should how they can open bank accounts, withdraw and deposit money , apply for a loan etc.
Our aim is to develop an exhaustive but simple curriculum for these underprivileged people
where we can help people in getting the right knowledge about the following:-
Importance of Saving and Compounding
Banking and Investing ( Basic Knowledge about banking which will include filling
of bank slips, check, depositing and withdrawing money)
Credit &Debt
Insurance
Financial Planning ( how to use your money, how to invest under different
policies such as PPF,RD, FD)
Micro Entrepreneurship ( how to be economically self-sufficient, how to start
small business using micro loans)
Current government schemes
Current financial issues , policies and new budget
Moreover, We will develop a content for BCA( Business Correspondent Agents) who are
involved in doing retail banking for the underprivileged people. We will teach them about the
banking system in detail, how to operate Biometric Micro ATMs and Voice based Biometrics.
We want our curriculum to be activity based which enable underprivileged people to learn
about different modules in a fun way. We are also thinking of teaching them financial literacy
by taking examples from their daily life such as something related to agriculture, livestock etc.
Moreover , We are also thinking of making them through interesting stories and videos.
CURRICULUM
Importance of Saving and Compounding
Banking and Investing
Credit &Debt
Financial Planning
Insurance
Current government schemes
Current financial issues , policies and new budget
Micro Entrepreneurship
Importance of Saving and Compounding
Telling the different choices where they can save their money
Purpose of Savings
Transfer Money back to their families
Telling them the healthy financial habits.
Banking and Investing Definition of Banks and different
types of banks
Purpose of Banks
Procedure to withdraw and deposit money
Investment products and services such as PPF , RD, FD etc.
Credits and Debts Different types of credit available
Understand which types of credit are better suited for particular purposes
Telling about the complications of taking credit
How to apply for credit card
Precautions to be taken to prevent identity theft and fraud
Definition of Debts
Difference between good and bad debt
How to avoid the excessive debt load
Financial Planning How to manage your resources?
Options available to save your money such as Private Banks, Public Banks , Post office, Stocks etc.
Identify the risk in different investment schemes
Procedure
Legal laws which they need to know before choosing any particular option
Insurance Definition of Insurance
Benefits of Insurance
Different types of Insurances available
How to choose the iinsurance policies?
Legal Laws
Current Government Schemes
Schemes made by the government which are related to financial inclusion such as JanDhan Yojna, MNREGA
Schemes which are not directly related to financial inclusion but are helpful for these underprivileged people such as free education for child below the age of 14 , free polio drops for children less than 6 years old etc.
Current financial policies and Budget
Providing the detailed information about the new budget
Financial polices and reforms which are in the interest and benefit of these communities
Microentrepreneurship Definition of Entrepreneurships
Rewards of being an Entrepreneur
Challeneges that entrepreneurs face
Recognize the different kind of Entrepreneurship opportunities
Telling them about getting empowered by training the financial literacy in their communities
Discover the financial needs and funding options available such as Kiva, Grameen Bank etc.
ACTIVITIES AND ASSESSMENT
This will be the curriculum we will be going to provide to the people who are at the bottom of
the pyramid. It will be implemented in a span of two months. One module will be covered every
weekend.
The curriculum will be implemented in fun ways where most of the times we will show them
the nice videos and will conduct fun activities.
We are thinking of doing some ice breaking activity in the beginning which will not only make
them involved with us but also will able to trust us.
We were thinking of doing an activity using plastic or fake currencies from poker set or
monopoly. We will going to distribute the currency and will ask them to buy the fake products.
This will help them to count the money , to do calculations , to buy things with money.During
this activity or after completion of activities we can ask them few questions such as Why if
seller has no change?, What if a seller asks you to pay more than the MRP written on the
product?. This process will help us to check their prior knowledge of these people and will give
us a chance to correct them and tell the write answer.
Evaluation and Assessment will be done by asking them questions every week after the
completion of module. We can score people who are close enough to the expected answer.
This will also give us an opportunity to correct these people and tell them the right answer. This
will happen every week. Moreover, there will recap of every session in the upcoming class and
brief quiz about the modules they have studied last week.
Other Approach is to monthly test them through the worksheets and MCQs .