Current status of Financial literacy in India

Current status of Financial literacy in India

Current status of Financial literacy in India

The 2012 edition of Visa Global Financial Literacy Barometer demonstrated that “India is lagging behind the global standard and it secured the 23rd slot in the overall ranking.” 

Improving and strengthening financial education initiatives in India is a major concern. This article will brief you about the current status of financial literacy in India and various International Initiatives of Financial literacy in India. 

Why Financial Literacy is important?

  • Financial Education
  • Financial Inclusion
  • Financial Stability

International Initiatives on Financial Literacy



Why Financial Literacy is important? 


Financial literacy stands for the knowledge and understanding of financial concepts. These concepts are earning, spending, saving, budgeting, investing, borrowing and need to be understood by any individual for making an effective decision in the financial market to manage personal financial resources effectively. 
 According to the Organization for Economic Cooperation and Development, “Financial literacy is defined as the process by which financial consumers/investors improve their understanding of financial products, concepts and risks, through information, instruction and/or objective advice, develop the skills and confidence to become aware of (financial) risks and opportunities, to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being and protection”.
Financial education is directly associated with financial inclusion and then financial stability.These are the 3 parts of an integral strategy. 

Financial Education -


It stimulates the demand for financial products and services. It promotes awareness among the individuals regarding the need and benefits of financial services provided by Govt policies, banks, and alternative establishments. 


Financial Inclusion -


It works from the supply side by providing access to numerous financial services to people who were not earlier able to access financial services.

Financial Stability -


Both, financial education and financial Inclusion promote better financial stability.  
For, further information on Need, Challenges and opportunities for financial literacy in India, click

International Initiatives on Financial Literacy


The OECD (Organization for Economic Cooperation and Development) undertook various surveys of financial literacy level among youth, women and the general population on a whole. OECD conducted a project on financial education to emphasise the ill-effects of the low level of financial literacy. They also developed various research and survey instruments for successful implementation of financial literacy programmes. Besides this, they also initiated a large number of financial education programmes in all countries. Findings from their studies clearly indicate that the youth are more exposed to financial risks than their parents.The reason behind this finding was frequent introduction of new services and systems in the market, gradual increase in the financial market products.In the year 2005, concerned at the level of financial literacy in the youth, OECD advised that “financial education should begin for school level itself. 
The focus was to educate individuals about their financial matters as early as possible in their lives” (OECD, 2005). OECD established the International Network on Financial Education (INFE) in 2008. The goal for the establishment of INFE was to assist in the formulation of National Strategies for Financial Education. Today, nearly 90 countries and from 90 countries more than 200 public institutions have joined the INFE. 
Financial Access Survey, 2010, indicated in India, financial exclusion is measured in terms of bank branch density, ATM density, bank credit to GDP. As you can check in table 1, The bank deposit to GDP was observed quite low as compared with most of developing countries in the world. For more information and statistic on financial literacy in India, Click

Power to Me - A Contribution towards Financial Literacy in India


Power to Me in India is working towards the upliftment of financial literacy. We provide you with 4-course modules-
  • Financial Literacy
  • Personal Empowerment
  • Business Institute to Growth 
  • Investment Empowerment. 
Our in-depth courses give you a direction towards your journey of financial literacy leading to personal empowerment, growth in business and resulting in investment empowerment.  Looking at the need of financial literacy and financial planning in India, Power to me has designed and launched its course modules based on your knowledge and interest to reach the overall goal of a Financially literate and empowered India. 
Remember it’s never late, start the journey towards your financial planning now. Get started with us now. 



References:

OECD. (2005b). Recommendation on Principles and Good Practices for Financial Education and Awareness: OECD, Directorate for Financial and Enterprise Affairs, 4. 
Lusardi, A., Mitchell, O. S., and Curto, V. (2010). Financial literacy among the young. The Journal of Consumer Affairs, 44 (2): 358-380.