Financial Literacy Curriculum Arham Partap Jain, Founder Apeejay Micro

Financial Services

This document consists of the definition of financial literacy, problems and challenges in

implementation of the financial literacy, curriculum, why it’s a crucial part of financial inclusion.

Moreover, It will explain the methodology to implement the curriculum among underprivileged

people.

11/30/2014

Apeejay Micro Financial Services is an Non-Government Organization (NGO) established in

March , 2014 which focuses on the social inclusion , financial literacy and financial inclusion of

the people who are at the base of the pyramid by using technology.

SOCIAL INCLUSION

Social inclusion is central to ending extreme poverty and fostering shared prosperity.

It is both an outcome and a process of improving the terms on which people take part in

society. Our Objective is to provide Proof of Identity (PoI) / Proof of Residence (PoR) to the homeless

people, people with disabilities, beggars, rag-pickers, migrants, drug addicts, domestic workers,

widows, sex-workers, transgender etc. These people don't have any identity / residence proof

which disable them to basic rights of the citizen of the country. They are denied the opportunity

to lead a life of dignified existence.

Our Methodology We will help the above mentioned people in getting Aadhar Card by acting as ' Introducers' to the UIDAI (Unique Identification Authority of India). We can also act as Regulators or Undertaking agencies to UIDAI. We will also be associating and collaborating with the NGOs and SHGs (Self Help Group) who are working the poor/ marginalized group. Aadhar Card will bring them under a cover of Social Security. It is the first step in the development of these people. Once these people will be issued Aadhar Card. They will be eligible for the government aided schemes such as MNREGA etc. and subsidies. Moreover, these people will be able to open bank accounts through their Aadhar cards. Inclusion of the marginalized helps residents get identity recognizes his/her existence and helps the state in reaching out to the resident for delivery of various welfare programs. FINANCIAL LITERACY

Most of underprivileged people do not the value the importance of compounding. They don’t

know how crucial can it is to save money. These are illiterate people who don’t know how to fill

up bank slips, withdrawing and depositing money and other paperwork. Most banks/post-

offices don’t treat poor people with respect or priority like they do with regular customers and

sometimes they manipulate them by saying that they can’t open bank account because of lack

of documents.

Our Methodology We will provide financial literacy curriculum to different communities. We will not only educate these community people but also we will empower them. We will motivate and teach them to implement this financial literacy curriculum in their respective communities and make some money out of it. FINANCIAL INCLUSION

Financial Inclusion is the process of ensuring access to appropriate financial products and

services needed by all sections of the society in general and vulnerable groups such as weaker

sections and low income groups in particular at an in a fair and transparent affordable cost

manner by mainstream institutional players

We will help underprivileged people to get bank accounts. We will open poor people bank

accounts on the basis of their Aadhar Card. Reserve bank of India has approved that just an

Aadhar Card will fulfill the Know Your Customer (KYC) norms and will be sufficient to open a

bank account.

We will be opening Small Bank Account (RBI Circular :RBI /2010-11/487 RPCD.CO.RCB.AML.BC. No.63/07.40.00/ 2010-11). To open Small account the documents required are either Aadhar card or NREGA job card. This Small Account will act as BSBDA (Basic Saving Bank Deposit Account) ( RBI Circular : RBI/2013-14/355 UBD.BPD.(PCB).Cir.No. 35/13.01.000/2013-14) where a customer does not have to maintain a minimum balance. Our Methodology We will act as Corporate Business Correspondent to both Public and Private Banks of the

country. We will further hire BCA (Business Correspondent Agents) who can operate different

CSPs (Customer Service Points) I different unbanked and under-banked locations.

We will act as the bank representatives who will help bank in following ways:-

It will help banks in reducing their huge cost of infrastructure, salaries etc.

It will help villagers to open bank accounts.

It will teach villagers about the benefits of having a bank account

It will help villagers in banking transactions. (Deposit money, take money out of savings

account, loans etc.)

It is the cheap and effective alternative to bank branches.

It will empower people and open employment opportunities for them.

We will be using Biometric Micro ATM device to open bank account in both villages and slum

areas. Biometric Micro ATMs will allow customers to perform basic financial transactions using

only their AADHAAR number and their fingerprint as identity proof (along with a Bank

Identification Number for inter-bank transactions).Micro-ATMs will support functions like

deposits, withdrawals, fund transfers and balance enquiries.

Once the bank account is opened in different communities .We will choose a leader from the

respective communities who can collect and distribute the money to our customers on daily

basis and put it into the drop boxes placed there using the biometric Micro ATM. We will collect

the money from the drop box every week or two and submit it to the bank. The leader we

select will be somebody who is popular with the locals or may be the President (Pradhan ) of

the slum area . We will constantly monitor his/her activities. These leaders will be trained with

basic accounting skills and banking skills. Moreover, they will be given training regarding the

usage of Biometric Micro ATM device. This approach will help to empower the people living in

the slum areas and villages. It will also provide employment to the people who will help us in

our operation. Moreover, it will help us to gain the trust of the people living in those

communities.

We will be using mobile vans to go to different slum areas and villages. It will help us to swiftly

and easily open the bank account.

In future we are planning to use voice based biometric devices which will enable to open bank

account and do transaction on the basis of the voice. This will help us to reach different remote

areas of our country where language is the main barrier. Moreover, this device will eliminate

the cost of the local man.

SOME FACTS ABOUT INDIA

Geographical area- 7th in the

world

Population 2nd in the World -

1.35 Billion

One of the fastest growing

economies

36 States and Union Territories,

644 Districts

640 thousand Villages, widely

dispersed terrains

Multilingual and Multiethnic

Society

EXCLUSION SURVEY

Highest number of households (145 million) excluded from banking

Only 30000 villages have commercial bank branch

Only 17% of population has any credit

Only 34% of the population engaged in formal banking

50% of the population does not have bank account

Only 10% have life insurance cover

Just 9.6% have any non-life insurance

Why Financial Literacy is important? What problems it will be able to

tackle?

Problem faced by banks

India has 640,000 villages. Banks do not have their branches in every village.

They cannot establish branches in every village because administrative cost will be very

high i.e. infrastructure cost, telephone, electricity, staff salary, security guards.

The maintenance cost of individual bank account will be very high as compared to the

amount of money deposited, loans taken.

Banks have to bear heavy losses.

Most of the villages have no electricity, good schools therefore staff will be reluctant to

move there irrespective of the salary.

Problem faced by People

People living in village have to travel long distance for basic banking activities such as

cash deposit, cash withdrawal.

Most of the people living in villages are illiterate so they don’t know how to fill up bank

slips, other paperwork. They need to ask for help here and there in the bank office

. which will be difficult for them to manage

Most banks/post-offices don’t treat poor people with respect or priority like they do

with regular customers.

If Villagers did not get facility of banking / insurance then they had to rely on the money

lender who charged whatever interest rate he wanted to.

Problem faced by Government

They are not able to provide subsidies to the underprivileged people because most of

the people do not have any bank account.

They are not able to provide salaries of people who are registered under NREGA

scheme.

FINANCIAL LITERACY CURRICULUM

Financial literacy is very important aspect in social and financial inclusion. It is necessary for the

people who are at the bottom of the pyramid to know about the value of compounding. They

should how they can open bank accounts, withdraw and deposit money , apply for a loan etc.

Our aim is to develop an exhaustive but simple curriculum for these underprivileged people

where we can help people in getting the right knowledge about the following:-

Importance of Saving and Compounding

Banking and Investing ( Basic Knowledge about banking which will include filling

of bank slips, check, depositing and withdrawing money)

Credit &Debt

Insurance

Financial Planning ( how to use your money, how to invest under different

policies such as PPF,RD, FD)

Micro Entrepreneurship ( how to be economically self-sufficient, how to start

small business using micro loans)

Current government schemes

Current financial issues , policies and new budget

Moreover, We will develop a content for BCA( Business Correspondent Agents) who are

involved in doing retail banking for the underprivileged people. We will teach them about the

banking system in detail, how to operate Biometric Micro ATMs and Voice based Biometrics.

We want our curriculum to be activity based which enable underprivileged people to learn

about different modules in a fun way. We are also thinking of teaching them financial literacy

by taking examples from their daily life such as something related to agriculture, livestock etc.

Moreover , We are also thinking of making them through interesting stories and videos.

CURRICULUM

Importance of Saving and Compounding

Banking and Investing

Credit &Debt

Financial Planning

Insurance

Current government schemes

Current financial issues , policies and new budget

Micro Entrepreneurship

Importance of Saving and Compounding

Telling the different choices where they can save their money

Purpose of Savings

Transfer Money back to their families

Telling them the healthy financial habits.

Banking and Investing Definition of Banks and different

types of banks

Purpose of Banks

Procedure to withdraw and deposit money

Investment products and services such as PPF , RD, FD etc.

Credits and Debts Different types of credit available

Understand which types of credit are better suited for particular purposes

Telling about the complications of taking credit

How to apply for credit card

Precautions to be taken to prevent identity theft and fraud

Definition of Debts

Difference between good and bad debt

How to avoid the excessive debt load

Financial Planning How to manage your resources?

Options available to save your money such as Private Banks, Public Banks , Post office, Stocks etc.

Identify the risk in different investment schemes

Procedure

Legal laws which they need to know before choosing any particular option

Insurance Definition of Insurance

Benefits of Insurance

Different types of Insurances available

How to choose the iinsurance policies?

Legal Laws

Current Government Schemes

Schemes made by the government which are related to financial inclusion such as JanDhan Yojna, MNREGA

Schemes which are not directly related to financial inclusion but are helpful for these underprivileged people such as free education for child below the age of 14 , free polio drops for children less than 6 years old etc.

Current financial policies and Budget

Providing the detailed information about the new budget

Financial polices and reforms which are in the interest and benefit of these communities

Microentrepreneurship Definition of Entrepreneurships

Rewards of being an Entrepreneur

Challeneges that entrepreneurs face

Recognize the different kind of Entrepreneurship opportunities

Telling them about getting empowered by training the financial literacy in their communities

Discover the financial needs and funding options available such as Kiva, Grameen Bank etc.

ACTIVITIES AND ASSESSMENT

This will be the curriculum we will be going to provide to the people who are at the bottom of

the pyramid. It will be implemented in a span of two months. One module will be covered every

weekend.

The curriculum will be implemented in fun ways where most of the times we will show them

the nice videos and will conduct fun activities.

We are thinking of doing some ice breaking activity in the beginning which will not only make

them involved with us but also will able to trust us.

We were thinking of doing an activity using plastic or fake currencies from poker set or

monopoly. We will going to distribute the currency and will ask them to buy the fake products.

This will help them to count the money , to do calculations , to buy things with money.During

this activity or after completion of activities we can ask them few questions such as Why if

seller has no change?, What if a seller asks you to pay more than the MRP written on the

product?. This process will help us to check their prior knowledge of these people and will give

us a chance to correct them and tell the write answer.

Evaluation and Assessment will be done by asking them questions every week after the

completion of module. We can score people who are close enough to the expected answer.

This will also give us an opportunity to correct these people and tell them the right answer. This

will happen every week. Moreover, there will recap of every session in the upcoming class and

brief quiz about the modules they have studied last week.

Other Approach is to monthly test them through the worksheets and MCQs .