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2) The families we support have lots of debts. We don't know how to help them
Debt is a complex problem and people take debts for multiple reasons. It is important first to discuss with families or individuals why they borrowed money, in order to address the root cause (health emergency, loss of income, overconsumption, gambling, etc…). Part of the support will be one-to-one coaching to find solutions for each family. It would be also beneficial to run workshops or campaigns for the communities you work with. We recommend a 3-pronged approach:
- Awareness: facts and consequences of debt;
- Solution: how to get out of debt (this is where one-to-one coaching needs to complement any workshop);
- Prevention: how to stay out of debt
3) Financial literacy is about savings and bank accounts: it is not relevant to my target group
Financial education is not an academic topic, but pratical knowledge and skills to address issues about finance. Our approach to financial education is first to identify the issues, analyse if some issues can be solved by better money management, adapt programme (training, campaign, one-to-one coaching….) to address this problem and measure the impact.
It starts with understanding the expenses and incomes of your target groups, analysing with them what they could change, identifying reluctances and pressures that prevent them from changing. Having or lacking money impacts relations between people. So it is important to include this in any programme – it is not just about how to use a bank account.
At all stages, your target groups are at the centre of any programme: they are the actors of change. To do so, you can start with raising awareness on the consequences of their (lack of) decisions, then focus on practical solutions. For us, financial education is to turn money from a problem into a solution: it is about problem solving – it is about empowering people to solve their problems – at individual, family and community level.
4) My target group has no income/ very low income. How could financial education help them?
Most societies are now heavily monetised, i.e. almost all vital needs (shelter, food, hygiene, transport, education…) require a financial payment. While your target group may not have an income, they certainly have expenses, and most likely debts as well. Financial education can help them know their rights (especially as borrowers), prioritise expenses, know the potential social services they may be entitled to, plan beyond the day, build critical thinking to avoid taking bad decisions out of despair or falling victim of trafficking or scam, encourage their self-esteem. If they have a small activity, learning basic bookkeeping (even if they are not literate) is crucial to help them calculate whether they make a profit or a loss (which may push them further in debt and poverty). Empower them to identify how they can improve their profit to make a more decent living, how they can increase their sales, get their customers to pay them, addving value to their products or services.
5) The students we support often ask money to their parents who then take a loan. How can we break that circle?
Include financial education to your students’ curriculum: teach them how to track expenses, write and follow their budget, help them be more rational and factual when they take purchase decisions: make them realise the cost of their purchases on their parents by using daily life comparison (a mobile phone = x days of rice or that many cows). Reverse peer pressure and turn it into a positive pressure to be mindful with money and considerate to others, instead of a race for more consumption for the latest flashy thing. Involve parents and students so that they understand that managing money is a shared responsibility. Shift the students’ view on money from “individual” to “collective” so that they understand the impacts of their decisions on others – especially their parents and siblings.
6) My staff don't know anything about finance. Wouldn't it be better to ask a bank to run a session? They could do it for free.
Your staff may not manage their money as well, and by learning to do it, they will better explain to your target groups why and how to do it, from a practical point of view, as a peer. Your target groups trust them. Besides your staff know what issues your target groups face and what kinds of programmes will work with them. Your target group will not identify with finance people who most likely will use jargon, write numbers and spreadsheets on a board, and use financial literacy sessions as a way to market their services or products. Banks also tend to have a “product-centered” view about financial literacy while we think it should be “people-centered” and start with analysing your target group’s issues at individual, family and community levels. Your staff may also embed practical money management into existing programmes such as nutrition, WASH or gender-based violence, as many problems also have a financial side.