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Financial Literacy Campaigns in India: need of the hour

"Managing money is the root from which the buds of prosperity blossoms"

In order to make judicial decisions and make use of financial services, it is essential that people should be literate enough to understand the basics of managing money. The concept of managing money forms a crucial part of financial literacy. Financial literacy enables people to make the right financial choices and judicious use of their finances.

But are we moving on the path of making India financially inclusive through financial literacy? Let’s check this through some facts:

  • India is home to 17.5% of the world’s population and according to a survey conducted by Standard & Poor’s, over 76% of Indian adults lack basic financial literacy and they don’t understand the most basic and key financial concepts.

  • According to a survey on Global Financial Literacy in 2012 conducted by VISA, only 35% of Indians were financially literate and India was among the least financially literate countries. It demonstrated that “India is lagging behind the global standard and it secured the 23rd slot in the overall ranking.”

  • Another survey of “Financial Literacy among Students, Young Employees and the Retired in India” conducted by IIM-A supported by CITI Foundation reveals that “high financial literacy is not widespread among Indians where only less than a quarter population have adequate knowledge on financial matters. There is lack of understanding among Indians about the basic principles of money and household finance, such as compound interest, the impact of inflation on rates of return and prices, and the role of diversification in investments.”

India is home to 17.5% of the world’s population and according to a survey conducted by Standard & Poor’s, over 76% of Indian adults lack basic financial literacy and they don’t understand the most basic and key financial concepts.

Source: LiveMint

It's been 70 years since we have got independence but to a maximum population of rural areas, financial literacy is still a distant reality. Majority of them are in absolute financially illiteracy and the villagers become easy victims of banking fraud, getting their hard earnings lost.

It highlights how much we are lagging behind in terms of development of our countrymen. Financial literacy may seem beyond comprehension to the majority in developing countries like India yet it has become a prime priority. Financial illiteracy is havoc, shaking India badly and the country demands fast removal. It is acting as a burden on the economy. India is facing a lack of long-term investment both at the level of household and the level of the country as a whole. People feel safer to invest in physical assets and short-term monetary instruments. This causes the inability to meet life goals and heavy infrastructure development of the nation. Consumers who cannot comprehend basic financial concepts such as interest compounding and financial risk diversification, often end up paying higher transaction fees, pile up unmanageable debts and end up paying higher interest on loans.

Financial literacy enhances individuals’ ability to ensure economic security for their families. In India, there is a need to reach out to lower income groups and economically weaker sections on one hand and on the other, to the wealthy ones who are hyper-connected and require tailor-made financial products but have limited awareness of the possible financial solutions.

India has always been a fertile ground for swindles that have bilked mostly low-income households of millions of rupees. The financially illiterate are usually easy pickings. The investors have been periodically lulled into dubious schemes by nefarious characters. The poor have now become wary of investing money even in credible organizations.

Considering the scenario, deliberate actions to promote financial literacy is the need of the hour. In our country, not everyone is so well versed with the means of acquiring requisite knowledge.

In order to ensure that the benefits of financial literacy reach to the poorest of the poor and even the rich but unaware, it is essential that the one who’s aware make others aware. This judicious motive can be achieved through financial literacy campaigns. It does not symbolize the weakness of others, rather it is a quintessence of selfless service for the well-being of humanity and the economy as a whole.
A prosperous country is the fruit of effectiveness and efficiency brought by its rational citizens.’

The element of rationality can be imbibed into our country through financial inclusion. And an effective way for financial inclusion is the financial literacy campaign. What we need is not just having bank accounts for all but rather a good amount of transactions taking place through these accounts. We need a drastic overhaul of approach to savings and investments by Indian households.

Rajat Gandhi in an article published in The Economic Times said, “No matter how many banks you open and how many boots you have on the ground, if a person does not know about the financial options that are open to him, policies, schemes, and financial instruments will mean little. It is important for a person to firstly know what to look for and only then think of the benefits that he can obtain from it.”

We require an emphasis on expanding the knowledge on financial matters and products so that one can:

  1. Understand how to use and manage money and minimize financial risk

  2. Manage personal finance efficiently

  3. Identify the benefits and facilities offered by banks and boycott the moneylenders.

  4. Derive the long-term benefits of savings.

Financial literacy campaign is quintessential for a better change. Its ideation and proper execution can create a profound impact. The digital media can be very helpful in this. Video clips, short films, and posters can be an effective method to dissipate this very essential information. This cannot be executed without creating a digital arena to implement this. The Digital India program is expected to increase the digital fluency in coming years. With mobile phones getting more convenient each passing day, it’s easier to reach people through this platform.

India is the world’s second-biggest smartphone market with over 220 million Smartphone users but when we ponder upon how many of these use the digital payment methods, it is shocking.

We require a consolidated effort by banks, government, various financial institutions, and insurance companies to tackle this problem. A framework that converges the individual efforts is what our country demands and there is a need to put in more efforts during the Financial Literacy Week, as observed by RBI. Training in smart spending which includes fulfilling needs before wants, preferring savings over loans, proper use of credit card, understanding any financial instrument before investing etc. is what we lack currently. An innovative strategy covering maximum population should be built by all the stakeholders. The questioning behavior while using financial services can be brought through these campaigns.

Indian financial regulators like RBI, SEBI, IRDAI are taking sincere efforts in this direction like the creation of National Strategy for Financial Education which lays out the efforts taken by them, banks, stock exchanges, etc.

‘Financial literacy is an invaluable life skill which should be ingrained in an individual right from the start.’

Financial literacy is not an age bound concept. It should be inculcated right from childhood. The little concept of depositing small amounts of money in a piggy bank is in itself an important lesson. The best practice would be introducing the concept of money in the home only because it is a provocative topic and may expose the children to absorption of wrong perceptions about money management, many a time resulting in the formation of bad money habits from the foundation stage itself.

It is not certain that only poor and uneducated lack financial literacy. Even the rich and educated suffer from financial illiteracy which results in unproductive investment decisions. Financial literacy is the need for all sections of society. The starting should be done from the inclusion of uneducated, poor and economically backward people to the organized financial system which forms a big portion of our society. Free education about financial concepts including training on how to generate money and basics of saving and investment should become the core of these campaigns.

The one who is educated and comparatively well-off should be given knowledge about how they can use their earnings in the best possible way by investing in various financial products. The rich should be educated about different investment opportunities in and outside India and how can it be useful for themselves and society.

One of the most important segments of our society is women. Financially educating women generates a multiplier effect in having a substantial impact on disseminating financial literacy to future generations. Thus, a conducive financial landscape with a blend of a favorable regulatory regime, innovative women-centric products/schemes, enhanced mobility, robust customer protection framework and reformed attitudes towards women will increasingly stimulate women to be well equipped with financial skills. This will, in turn, encourage a rise in women’s foray into the workforce and yield success for the Indian economy.

Consider an example,:

A person buys an insurance policy after considering its benefits and encouraged by friends and the insurer. But he gives it up midway as he doesn’t have money to pay the premium. This example reflects lack of proper awareness, adequate planning and proper assessment of income consistency. Financial education and awareness are the most powerful antidotes against risky investment traps. People need to understand that the price of financial illiteracy is very high.

There have been many efforts put in by government and various organizations in this direction. Financial Literacy Week is an initiative by RBI to promote awareness of key topics every year through a focused campaign. The RBI has developed tailored financial literacy content for five target groups' viz. Farmers, Small entrepreneurs, School children, Self Help Groups and Senior Citizens that can be used by the trainers in financial literacy programs. Audiovisuals have been designed for the benefit of the general public on topics relating to Financial Literacy. These Audiovisuals are on "Basic Financial Literacy", "Unified Payments Interface" and "Going Digital". All this is available in 13 regional Indian languages.


When people are financially literate, they are more likely to explore the products and services offered by banks and use them for their benefits. This accelerates the pace of financial inclusion, where everyone can access the basic banking facilities rather than relying on the orthodox systems of money market such as borrowing money from Zamindars/Sahukars or village money lenders.

Roadshows, public rallies, puppet shows, workshops, chaupals, inspirational movies and digital means can be used effectively as part of financial literacy campaigns. So, let’s not just wait for others but rather become ourselves the change bringers through financial literacy campaigns.


By Kriti Vishwakarma

Vittshala-The Financial Literacy Cell of SRCC is a noble initiative aiming at making India financially literate. It undertakes various projects, campaigns and drives for marginalized and underprivileged sections of the society. Join us in our mission to fight financial illiteracy and contribute your part to the nation.



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