Financial literacy is essential to an individual’s personal growth and development. A financially conscious individual is an asset to an economy as an investor, borrower, lender or spender. In India, the majority of the population does not fall into this category. If the country is to reap the benefits of the demographic dividend, it is essential that the majority of its population is financially literate.
In an exclusive conversation with The CSR Journal, Mr. Bhavani Prasad Deshmukh, Head of Regional Public Affairs and Community Relations, Fidelity Investments India, talks about the firm’s efforts to impart financial literacy in India. Here are excerpts from the interaction.
1. Financial literacy statistics in India are abysmal, with only 24% of the population literate. What role can CSR play in improving these numbers?
Social and financial inclusion go hand in hand, and both are considered essential for the overall growth and development of any country. Global policymakers have viewed financial inclusion as an integral component of economic and social growth over the past two decades. It has been considered essential in the fight against poverty in emerging countries like India. Financial inclusion can only be achieved by promoting strong financial literacy among all sections of a country’s population. It enables economic empowerment at the individual level and thus contributes to greater social equality.
Large corporations and public sector companies, through their corporate social responsibility (CSR) programs, have been focusing for some decades on improving the underprivileged sections of society through education-oriented programs. Education leads to increased financial awareness and inclusion. Financial and digital literacy are essential tools to address socio-economic vulnerabilities and poverty.
2. Financial literacy is key to empowering women. How can India Inc. work in this direction?
In India, the road to gender equality is long, due to the many societal variables involved. Gender equality in society generally largely depends on the increased financial inclusion of women. Thus, several companies have made concerted efforts to educate girls, especially those from disadvantaged backgrounds. An educated and financially conscious girl is better able to make the right savings and investment decisions for herself and her family. Targeted efforts are needed to help them learn about the value of money, good saving and investing habits, how to become self-employed, and more, at an early age. They should also learn to be safe when making digital transactions, to protect their income and savings.
As a financial services company, Fidelity has focused at the enterprise level on corporate social actions to empower women with financial literacy. At Fidelity Investments India, our corporate social responsibility (CSR) program has focused on educating children from disadvantaged backgrounds, especially financial literacy for girls. India Inc. has also been working more and more recently alongside the government to empower women through education and financial awareness. While these are all steps in the right direction, we must continue to build on these efforts to ensure gender equality through financial inclusion.
3. In your opinion, what is the ideal age for a person to start acquiring financial knowledge?
The sooner the better. Ideally, financial literacy education should be introduced in phases at school so that children begin to learn about money and how to manage it, from an early age. Besides learning at school, I’m sure children can be introduced to learning financial literacy much earlier at home through their parents and grandparents.
4. What role can Indian youth play in improving the financial literacy scenario in India?
Young people today are more digitally connected than ever, which has also made them more aware of and concerned about inequalities in society and the need to address them. They are more inclined today to “give back to society, not only money but also their knowledge and their learning, for the good of others”. Young people who have a good knowledge of the fundamentals of finance should come forward to share it with children from disadvantaged backgrounds, thus helping to promote financial literacy in them. Today, this happens in good measure thanks to the volunteerism of India Inc.
5. Please shed light on the financial education program of Fidelity Investments India?
At Fidelity Investments India, while we work on many CSR projects, we have a good number of enthusiastic volunteers who regularly organize financial education sessions in schools for children from disadvantaged backgrounds as well as young people who follow vocational training for various jobs, in the states of Karnataka and Tamil Nadu where we have our operations. Fidelity curated content for different classes in schools, in multiple languages. These are delivered in local languages by our volunteers, so that learning is most effective for the children.
6. What are some of the challenges the organization has faced while running this program?
The last two years have been difficult due to the pandemic. While our financial literacy sessions for children in schools had taken a short hiatus, we had continued to run virtual skills training projects for young people, where they also attended financial literacy sessions.
The pandemic has also introduced what has come to be known as a “learning gap” among children from less privileged backgrounds. This means that, for example, a child who is in 4th grade has knowledge that is probably equivalent to that of 2nd or 3rd grade. Experts say there is currently a year and a half learning gap. for students in certain upper grades. The schools we support through our nonprofit partners have recently focused on closing this learning gap through bridging classes. This discrepancy will likely have the effect of delaying the renewal of our financial literacy sessions for children, until we are able to ensure that children have enough foundational knowledge to build on.
The other challenge we constantly face is the difference in teaching standards in different schools, although they all use the same state curriculum. Therefore, before conducting sessions, we must ensure that we understand the knowledge levels of the target students and tailor our content accordingly. Thus, we undergo a good deal of preparation before delivering each session.
7. How does this program help students and teachers make smart financial decisions in the future and achieve their personal and financial goals?
One thing we ensure when we hold financial literacy sessions in schools is that regular teachers are also present in the classroom. While this helps volunteers connect better with children (often teachers are able to inspire students to respond appropriately to the lessons we teach, allowing us to bond with them), it helps also teachers to understand the fundamental concepts of the financial industry. , which may not be available in the regular curriculum followed by these schools.
Our financial literacy sessions begin by focusing on the fundamentals of money management, including the value of money, saving habits, how banks work, types of bank accounts, how to getting student loans through nationalized banks, self-employment options, etc.
When we teach children these fundamental concepts from an early age, they are better equipped to plan for the future, especially when it comes to making financial decisions about things like college, career, retirement, etc. It basically puts them on the path to realizing their dreams. Of course, nothing comes without a lot of dedicated effort.
8. How is the scalability of the program. Does the organization plan to continue expanding into the Indian market?
Loyalty, globally, has a strong focus on financial literacy, especially among women and children of diverse racial and ethnic backgrounds. Similarly, in India, we are focusing on the financial literacy of children from disadvantaged backgrounds, especially girls. We are seeing increased demand for these financial literacy programs from the schools we support. This encourages us to increase our volunteer base within each business unit. As we slowly emerge as a society from the pandemic, we are seeing an increased eagerness among our volunteers to make even more of a difference to society. We couldn’t ask for anything more.