Citi Center for Financial Literacy (CCFL)
The Citi Centre for Financial Literacy (CCFL) was launched on September 10 th , 2005 as a department of the School exclusively dedicated towards spreading and managing the activities of Financial Literacy. The concept of Financial Literacy, evolved by SEWA Bank for its members, is essentially spreading the knowledge of good money management practices. It encompasses all monetary transactions that a person enters into such as earning, spending, saving, borrowing and investing. The Center has understood that these transactions cannot be avoided and they are an integral part of a person's life, and hence the introduction of financial literacy will help people, especially women to manage these transactions to their advantage.
Hence, the School felt that the concept of financial literacy for the poor was very essential. Poor people in developing countries, like people of all strata over the world, aim for economic as well as social security for themselves as well as their families. However, they have fewer resources and opportunities and most of them live in high-risk and unpredictable environment. In this context, managing small amounts which they have becomes vital.
The main objective of CCFL is, "spreading Financial Literacy amongst the poor, especially women by building their financial awareness, knowledge and skill to enable them to manage their finances and thereby making them financially self-reliant and provide them better and secured future".
Understanding the lives of the poor women and Financial Literacy being two of the five mandates as well as focus and expertise of the School, this programme becomes vital for the School. Building assets is important for poor people as it is the basis for economic security. Access to appropriate financial products and services, along with the financial skills to manage these resources well, are key to the process of asset accumulation. The role of financial literacy becomes crucial at this point, as poor people in developing countries use many creative and sometimes complex strategies to manage their money, which often develop through trial and error rather than design. They often tend to be more reactive than proactive. In the context of few resources, persistent downward pressures, and complex financial landscapes, financial literacy can play a critical role in helping people manage and preserve the few resources they have and work towards their economic goals.
Therefore, with financial literacy, microfinance clients will have opportunity to learn skills related to...
- Setting economic goals,
- Making a financial plan,
- Managing cashflow,
- Minimizing debt, and
- Planning for future
There is a pressing need for the development policies and programmes to give equal importance and attention to financial literacy for the poor. The potential benefits are clear, both for different groups among the poor and for the providers of financial services.
Realising the needs and importance of Financial Literacy, the Citi Centre for Financial Literacy (CCFL), plans to work on a larger scale, undertaking action research with respect to varying needs of different segments of the population in different areas. Subsequently, it plans to move on to developing training program modules and manuals and finally conduct trainings in various parts of the sub-continent.
The documents on these various learnings are published for wider dissemination of knowledge and awareness. The area of implementation which CCFL targets is relatively less explored of financial literacy for the poor. The School works with small number of organizations in order to initiate action research with them, and with these learnings develop high quality course material and further train trainers coming from a number of organizations.
Based on the objectives, CCFL, aims to take up financial literacy as a National Financial Literacy Drive and further to that a Movement amongst the poor. The objective of the National Financial Literacy Drive (NFLD) is to generate awareness and spread knowledge on financial literacy amongst 1.5 million poor women in ten states all over India , through different Microfinance Organizations across different States. The ten States which would be covered through this Drive are, Tamil Nadu, Karnataka, West Bengal, Rajasthan, Manipur, Uttar Pradesh, Gujarat, Bihar , Chattisgarh and Orrisa.
The methodology which NFLD will follow will be, to identify ten Microfinance Organizations to work as partners to undertake "Financial Literacy" drive. These organizations would be selected based on their experience in the sector and their demand for financial literacy. The Center would train 100 master trainers all over India , who will in turn train 10 trainers each. Therefore total no of trainers would be 1000 who would training 1500 women each. The CCFL will design a monitoring and evaluation system for the Financial Literacy Drive which can be implemented in the field. The Drive has already been initiated and piloted with two MFIs, SHEPHERD based in Trichy and Village Welfare Society in Kolkata.