–By Gracy Singh
Financial literacy is a form of education wherein an individual learns about basic financial skills that aid them in the management of budget and debt, and also allow them to devise profitable saving techniques. To put it simply, financial literacy refers to the ability to manage one’s own money. The very idea of homemakers reflects the widely held image of women. Despite its stereotypical nature, though, it highlights how financial literacy can lead to empowerment; since it stimulates the formation of a financial identity for household savings. Additionally, it allows them to receive access to formal credit for gainful employment.
Financial Illiteracy In India
The survey found that rural women have the lowest rate of financial literacy
Given the relevance of the issue, the students of the School Changemakers’ Program took it upon themselves to provide an insight into financial literacy in India. They suggested policy proposals with respect to how the state of financial literacy today could be improved. The extensive research highlighted the lacuna in financial literacy in India. Here, they emphasized the survey conducted by S&P which suggested that 76% of the Indian population is not financially literate. What was even more shocking was the fact that 85% of the respondents were unaware of their credit scores.
Their research further highlighted the tremendous gap concerning financial literacy across genders and classes. It was found that rural women are the least literate in terms of finance wherein urban men have higher levels of financial literacy. Ironically, 65% of respondents agreed that women have less financial literacy but at the same time, they were apprehensive about women making financial decisions.
How Do We Tackle The Problem?
Consequently, the team put forward policy proposals to tackle these problems. Firstly, to address the issue of the existence of cultural barriers to financial literacy with respect to community norms, large scale implementation of financial literacy programs and their association with women empowerment programs must be implemented. The group members emphasized programs that could bring about an attitudinal change.
Another major barrier is the inattention by the education system in terms of dealing with the subject. Hence, there is a need to develop an integrated financial literacy curriculum. The digital divide is another major obstacle to financial literacy. The changemakers highlighted the digital divide between rural and urban areas and expressed how merely owning a smartphone does not make one digitally sound. Therefore, it is of utmost importance that the government incentivizes digital use especially for the farmers in the rural areas to incorporate them into the digital economy.
The extensive research and presentation of statistics emphasized the importance of financial literacy and how it can provide the citizens with significant monetary power to improve their budgetary activities. It is also of utmost importance that the government makes policy interventions to emphasize this neglected issue; thus enabling people to march towards the road to financial empowerment.