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Why Financial Literacy will Enhance Financial Inclusion

Why Financial Literacy will Enhance Financial Inclusion. What is financial literacy?. Awareness, knowledge and skills to make decisions about savings, investments, borrowings and expenditure in an informed manner. Financial literacy can lead to financial wisdom.

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Why Financial Literacy will Enhance Financial Inclusion

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  1. Why Financial Literacy will Enhance Financial Inclusion

  2. What is financial literacy? Awareness, knowledge and skills to make decisions about savings, investments, borrowings and expenditure in an informed manner.

  3. Financial literacy can lead to financial wisdom Ability to manage money not just deal with it. Ability to use skills to take wise decisions for the future.

  4. Why do people get financially excluded? Lack of perception of the value of availing of formal products and services. Lack of information and knowledge of services hence inadequate access to services.

  5. 1. Lack of perception of the value of availing of services A financially literate person can link her need for a product or service with those available within the banking system. A demand for financial inclusion is created through an appreciation for what is available.

  6. 2. Lack of information and knowledge of services The formal banking system will find a financially literate person easier to approach. A financially literate person will seek information about available services to operationalise her financial decisions and hence access what is available.

  7. How Financial literacy empowers women Financial literacy builds women’s capacities to make decisions and take responsibility for those decisions. It increases their economic space.

  8. How financial Inclusion empowers women? Linkage to formal financial systems mainstreams poor producers. Women's sense of self esteem increases when their productive lives include mainstreaming into formal systems. Their economic status can be improved.

  9. The financial literacy, inclusion and empowerment three-way link Women who learn to manage money and know how to harness the existing formal financial systems to access products and services have an increase in their economic status and levels of confidence. A hitherto male dominated world (vis-à-vis gender) and a hitherto non-poor dominated space (vis-à-vis class) is made available to poor women.

  10. From women, to men, families and communities Working with women enhances family wellbeing. Interventions are more effective when men are involved since their buy-in decreases gender constraints for the women. Community level inclusion is most productive since it relaxes social norms which also inhibit women and the poor from financial spaces.

  11. Thank You

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