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Resource Library / Financial Literacy: A Step for Clients towards Financial Inclusion

Monique Cohen
Candace Nelson

Monique Cohen, President & Founder, Microfinance Opportunities, USA Financial education lies at the nexus between consumer and provider of financial services, introducing the consumer to new knowledge and behaviors that will help them to navigate a growing array of financial products and services. Within the microfinance community, there is increasing interest in financial literacy for low-income populations, but confusion persists around what this means and what actions can be taken to build financial capabilities. The chapter opens with a clarification of what is meant by financial education, financial literacy and financial capabilities. It then turns to the range of stakeholders (government, financial services, consumer advocates) driving this agenda and their differing, sometimes overlapping objectives. Next the paper examines what makes for effective financial education and how resources have been deployed to support this process, as well as content and delivery of key financial literacy messages. In light of the debates surrounding the value of financial education, the chapter addresses the evidence to date on the outcomes and impacts of financial education as a catalyst of behavior change. The paper concludes with a consideration of the challenges of scale and sustainability in financial education.

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