Financial Literacy

World-wide, tax incentives have served as an important public policy tool for encouraging voluntary retirement savings by the workforce. However, as the target population for micro-pensions are not taxpayers, a focus on tax incentives as a vehicle to encourage voluntary pension savings by this audience would be misplaced. In this context, we need a tremendous input of human capital among low income households in terms of financial planning and the role for disciplined retirement savings. India is faced by a gigantic gap on this front and a quantum improvement of financial knowledge among these target households will be required for achieving broad-based voluntary participation.

Using a grant by KfW, and in partnership with a variety of institutions including SEWA Bank, FWWB and ISMW, IIMPS is producing a range of financial literacy tools targeting the customers of micro-finance institutions and members of cooperatives and worker unions. These tools include a short course on financial concepts (ABC of Money), films, street plays, simulation calculators and comics in multiple languages.

These tools will also be used by various leading MFIs across multiple states through the National Alliance for Financial Literacy in delivering information and knowledge regarding the need for retirement savings and insurance as well as the underlying concepts of starting early, regular saving and compounding.