Digital and Financial literacy for inclusion | Products and Services | NGO | CSR | India

Financial literacy in India is a crucial issue, as many people struggle with basic financial concepts such as budgeting, saving, and investing. Low levels of financial literacy, lack of access to formal financial services, and a lack of financial education in schools and universities are some of the main challenges facing India. The Indian government has launched various initiatives to promote financial literacy, and digital financial services have increased in popularity. However, many people may lack the knowledge or skills to use these services effectively. Non-governmental organizations (NGOs) are working towards improving financial literacy in India through social and behavior change communication strategies, education programs, and outreach initiatives. The core objective is to enhance access, availability, usage, and quality of financial services through financial literacy to the population targeted and communicate any deficiencies if applicable to local branches. SBCC can be used to promote positive financial behaviors and discourage negative behaviors, and it can be used to target specific groups or communities that may be at risk of financial exclusion.

A large segment of the Indian population is excluded from the formal systems of payments leading to disparities in accessing financial services. The approach of this implementation is to create healthy and balanced financial habits.

Financial literacy in India is an important issue, as many Indians face challenges in managing their personal finances. Here are some key points regarding financial literacy in India:

Low levels of financial literacy: A 2019 survey by the Reserve Bank of India (RBI) found that only 24% of Indian adults were financially literate. This means that many people in India may struggle with basic financial concepts such as budgeting, saving, and investing.
Lack of access to financial services: Many people in India, particularly in rural areas, lack access to formal financial services such as banks and insurance companies. This can limit their ability to manage their finances effectively.
Government initiatives: The Indian government has launched various initiatives to promote financial literacy, such as the National Centre for Financial Education (NCFE) and the Financial Literacy Centers (FLCs) established by the RBI. These initiatives aim to improve financial literacy through education and awareness-raising programs.
Digital financial services: The widespread adoption of smartphones and mobile internet has led to an increase in digital financial services in India. However, many people may lack the knowledge or skills to use these services effectively.
Role of education: Education plays an important role in promoting financial literacy in India. However, many schools and universities do not provide sufficient financial education to students.

Overall, financial literacy in India remains a challenge, but there are initiatives in place to address this issue. Improving financial literacy can help individuals make better financial decisions, increase their savings, and improve their overall financial well-being.

Awareness of Financial literacy is understood in a very narrow sphere of deposits and withdrawals, but it also includes knowledge dissemination, product and service illustration, and making people aware of the requisite tools and resources with the core objective to be financially inclusive in all ways of banking and thereof access to government-sponsored schemes.

By following a strategic, social, and behavioral change communication strategy we are creating a lasting impact. A crucial strategy component is Illustrative learning integral in the pedagogy, which makes people understand the importance of financial services and opportunities for every aspect of their life.

The lack of financial literacy and planning leads to poor financial decisions and debt, hindering economic growth and development.

Outreach is created for the development of target populations by facilitating diverse sections i.e., beginner, intermediate, elementary, and advanced users for the financial services and products. A focus is to create advanced users with strong financial education to help people to make informed decisions and raise aspirations.

As an enabler for financial independence and literacy, the approach has the objectives of creating:
Financial Knowledge: involves the understanding of key financial concepts and the ability to evaluate benefits in real-life financial situations.

Financial Behaviour: This involves the study of day-to-day money management, financial planning, spending, savings, investment, optimizing reliance on credit, and building a safety net for future well-being.
Financial Attitude: changing people’s response towards savings, prioritization of short-term wants over long-term security, inclination towards risk, et al. for future well-being.

Overall the core objective is to enhance access, availability, usage, and quality of financial services through financial literacy to the population targeted and communicate any deficiencies if applicable to local branches.

Responsenet is one of the implementing partners for the Phase II of the Scaling up of Centres for Financial Literacy (CFL) Project-PhaselI for the UT of Jammu and Kashmir.

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Financial Inclusion through Financial Literacy

Financial literacy is the understanding of financial concepts and the ability to make informed and effective decisions about personal financial matters. It is a crucial skill that is necessary for individuals to manage their money and make informed financial decisions, including budgeting, saving, and investing. One of the main benefits of financial literacy is the ability to create and stick to a budget.

Without financial literacy, individuals may fall victim to financial scams or make poor financial decisions that can have long-term consequences. There are many resources available to help individuals improve their financial literacy. These include financial education programs, books, and online resources. It is important for individuals to take advantage of these resources and to continue learning about personal finance throughout their lives. In conclusion, financial literacy is a crucial skill that is necessary for individuals to manage their money and make informed financial decisions. It involves understanding budgeting, saving, investing, and managing debt, and there are many resources available to help individuals improve their financial literacy. By becoming financially literate, individuals can create a secure financial future for themselves and their families.

SBCC and Financial Literacy

Social and behaviour change communication (SBCC) refers to the use of communication strategies to promote positive social and behavioural change in individuals and communities. It can be used to address a wide range of issues, including health, education, and financial literacy.

SBCC can be used to promote positive financial behaviours, such as saving and budgeting and to discourage negative behaviours, such as over-indebtedness.

SBCC can also be used to target specific groups or communities that may be at risk of financial exclusion or that may have specific financial literacy needs. For example, SBCC strategies can be used to reach out to women, who may face unique financial challenges, or to0 small business owners, who may need support to improve their financial management skills.

One of the key benefits of SBCC for financial literacy is its ability to reach a wide audience in a cost-effective way. By using various communication channels and targeting specific groups, SBCC can help promote financial literacy to a large number of people at a relatively low cost. In conclusion, social and behaviour change communication (SBCC) is a powerful tool that can be used to promote financial literacy and encourage positive financial behaviours.

By increasing awareness and understanding of financial concepts and products, and by targeting specific groups or communities, SBCC can help promote financial literacy to a wide audience in a cost-effective way.

Financial Inclusion

Financial inclusion refers to the availability and accessibility of financial services, such as banking, credit, and insurance, to all individuals and businesses, regardless of their income level or location. It is an important issue because access to financial services can enable individuals and businesses to improve their financial stability, increase wealth, and participate more purposefully in the economy.

There are several barriers to financial inclusion. These include a lack of access to financial institutions, such as banks and credit unions, in certain areas, as well as a lack of financial literacy and awareness of financial products and services. Additionally, some individuals and businesses may be unable to access financial services due to a lack of collateral or credit history.

To promote financial inclusion, governments and organizations around the world have implemented a range of initiatives and programs. These include:

Financial education programs: Financial education programs can help individuals and businesses learn about financial products and services, as well as how to manage their money and make informed financial decisions. This can help increase awareness of financial services and make them more accessible to a wider range of individuals and businesses.
Mobile banking: Mobile banking refers to the use of mobile phones to access financial services, such as banking and payments. It can be a particularly useful tool for individuals and businesses in remote or underserved areas, where access to traditional financial institutions may be limited.
Microfinance: Microfinance refers to the provision of small loans and other financial services to individuals and businesses in low-income or underserved areas. It can help increase access to credit and other financial services for individuals and businesses who may not have access to traditional financial institutions.
Public-private partnerships: Public-private partnerships can help bring together the resources and expertise of the public and private sectors to promote financial inclusion. This can include collaborations between governments and financial institutions, as well as partnerships between non-profit organizations and businesses.

Financial inclusion is an important issue because it can help increase economic growth, reduce poverty, and promote financial stability. By increasing access to financial services and promoting financial literacy, governments and organizations can help ensure that all individuals and businesses have the opportunity to participate in the economy and achieve their financial goals.

Financial inclusion refers to the availability and accessibility of financial services to all individuals and businesses. It is an important issue because it can help increase economic growth, reduce poverty, and promote financial stability. By implementing initiatives and programs such as financial education, mobile banking, microfinance, and public-private partnerships, governments and organizations can help promote financial inclusion and ensure that all individuals and businesses have the opportunity to participate in the economy and achieve their financial goals.

Financial literacy and financial inclusion are important issues in India. According to a report by the Reserve Bank of India, only around 35% of adults in India have basic financial literacy, and only around 53% of adults have an account at a formal financial institution. There are several initiatives and schemes in place in India to improve financial literacy and promote financial inclusion. Some examples include:

Jan Dhan Yojana: This is a financial inclusion campaign launched by the Government of India in 2014. It aims to provide access to a range of financial services, including bank accounts, credit, insurance, and pension, to all households in the country.

Pradhan Mantri Jan-Dhan Yojana (PMJDY): This is a national mission for financial inclusion launched by the Government of India in 2015. It aims to provide access to a range of financial services, including bank accounts, credit, insurance, and pension, to all households in the country.
One basic savings bank account is opened for the unbanked people.
There is no requirement to maintain any minimum balance in PMJDY accounts.
Interest is earned on the deposit in PMJDY accounts.
Rupay Debit card is provided to PMJDY account holders.
Accident Insurance Cover of Rs.1 lakh (enhanced to Rs. 2 lakhs for new PMJDY accounts opened after 28.8.2018) is available with a RuPay card issued to the PMJDY account holders.
An overdraft (OD) facility of up to Rs. 10,000 to eligible account holders is available.
PMJDY accounts are eligible for Direct Benefit Transfer (DBT), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY), Micro Units Development & Refinance Agency Bank (MUDRA) scheme.
Atal Pension Yojana (APY): This is a pension scheme for unorganized sector workers launched by the Government of India in 2015. It aims to provide a guaranteed pension to all citizens of the country, with the goal of promoting financial inclusion and security in old age.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): This is a life insurance scheme launched by the Government of India in 2015. It aims to provide life insurance coverage to all citizens of the country, with the goal of promoting financial inclusion and security.

This is an accidental insurance scheme launched by the Government of India in 2015. It aims to provide accidental insurance coverage to all citizens of the country, with the goal of promoting financial inclusion and security
Strengthening financial inclusion in India has been an important agenda of the government and various regulatory bodies such as RBI, SEBI, IRDAI, and PFRDA. Efforts have also been taken to spread awareness and increase financial literacy among small businesses. Listed below are a few such initiatives taken by respective regulatory authorities:

Reserve Bank of India (RBI)
RBI being the money market and the banking regulator has launched basic financial education as well as sector-focused financial education. These include financial literacy guides, diaries and posters covering the tenets of financial well-being such as savings, concepts of interest, time value, inflation, etc. To aid businesses, ATMs, payment systems, Ponzi schemes, financial awareness messages etc. are some of the other contents covered.

Securities and Exchange Board of India (SEBI)
SEBI also focuses on enhancing basic financial education and sector-wise financial education. Being the Indian capital and securities market regulator, it also arranges events such as World Investor Week and mass media campaigns. It also has a dedicated investor website.

Insurance Regulatory and Development Authority of India (IRDAI)
Like the other regulators, IRDAI also works on content development by creating brochures, handbooks, etc. It has also created a mandatory board-approved policy for insurers and arranged various seminars and quiz programs.

Pension Fund Regulatory and Development Authority (PFRDA)
PFRDA has a dedicated website called ‘Pension Sanchay’ launched in 2018. This website aims at increasing financial literacy from a retirement perspective.

National Strategy for financial education 2020-25

The National Strategy for Financial Education (NSFE): 2020-2025 document has been released by the Head of the Technical Group on Financial Inclusion and Financial Literacy (TGFIFL) – The Deputy Governor, Reserve Bank of India (RBI) on 20^th August 2020. The Strategy has recommended a ‘5 C’approach for the dissemination of financial education in the country.

This NSFE for the period 2020-25, the second one after the 2013-18 NSFE, has been prepared by the National Centre for Financial Education (NCFE) in consultation with all the Financial Sector Regulators (RBI, SEBI, IRDAI and PFRDA), DFS and other Ministries of Govt. of India and other stakeholders (DFIs, SROs, IBA, NPCI) under the aegis of the Technical Group on Financial Inclusion and Financial Literacy under the Chairmanship of Deputy Governor, RBI.

The ‘5 C’ approach of the strategy includes emphasis on the development of relevant Content in the curriculum in schools, colleges and training establishments, developing Capacity among intermediaries involved in providing financial services, leveraging the positive effect of Community-led model for financial literacy through appropriate Communication strategy, and, enhancing Collaboration among various stakeholders.