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Financial Literacy - The Case of Ghana Process and Levels of Intervention

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Financial Literacy - The Case of Ghana Process and Levels of Intervention December 2011 Prepared by: Maria Vitores - Team Leader Responsible Finance, maria.vitores_at_ ... – PowerPoint PPT presentation

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Title: Financial Literacy - The Case of Ghana Process and Levels of Intervention


1
Financial Literacy - The Case of GhanaProcess
and Levels of Intervention
  • December 2011
  • Prepared by Maria Vitores - Team Leader
    Responsible Finance, maria.vitores_at_gopa.de

2
Key aspects of a successful Financial Literacy
Initiative
2. Intervene at all levels
1. Process of integration of all relevant
stakeholders
3
Process
4
In order to succeed, the process of any Financial
Literacy Initiative must be Inclusive and
Participatory How does this translate to
reality?
5
In Ghana an informal working group was formed and
steered by SPEED (a GIZ and DANIDA project).
Initially, members were
Currently, the members are more
  • Ministry of Finance
  • Credit Union Association
  • Ghana Microfinance Network
  • Association of Rural Banks and its APEX Bank
  • Bank of Ghana
  • All the apex bodies (Financial NGOs, Susu
    collectors, Money lenders, Ghana Education
    Service)
  • Ministry of Finance
  • Credit Union Association
  • Ghana Microfinance Network
  • Association of Rural Banks and its APEX Bank

6
The role of the working group is to be a
platform for discussion and development of
Ghanas activities under financial literacy.
  • This includes
  • Identification of problems
  • Development of a plan of activities
  • Approving the materials to be used and other
    initiatives
  • Implementing the strategy

7
How did it work in Ghana within the meetings of
the working group several decisions were taken.
  • Key issues related to financial literary and
    development of what key messages
  • Type of educational material to be developed and
    approval of content
  • Radio programme development
  • Finally, the Financial Literacy Strategy for
    Microfinance sector

8
Positive elements
Stronger commitment from all parties
Consensus on how to address problems
Shared responsibility in addressing the issues
(all of them will contribute to implementing
their respective environments)
All initiatives related to Financial Literacy are
coordinated
9
  • Challenges
  • Decision process takes longer
  • Attribution of roles
  • Sustainability
  • (in Ghanas case not yet solved)
  • Budget

10
For a coordinated national strategy on Financial
Literacy it is a key success factor to have a
platform of discussion formal or informal where
all stakeholders are represented.
!
11
Levels of intervention
12
Regulators and Government
Financial institutions and Apex bodies
Clients and consumers
13
Financial Literacy Client Education
  • OBJECTIVES
  • Awareness
  • Knowledge Understanding
  • Changing Behavior
  • KEY AREAS
  • Client is informed client education
  • Client is able to make appropriate decisions
  • Client knows rights and uses them consumer
    protection

14
Financial Literacy Institutions and apex bodies
OBJECTIVE Better practices
  • KEY AREAS
  • Understand the client
  • Protect client
  • Adequate costumer care
  • Take up responsibility in client education
  • Establish standards (through self-regulation)

15
Financial Literacy Public Sector
OBJECTIVE Strong and protected financial
sector
  • KEY AREAS
  • Protect and inform consumers well
  • Develop adequate policies and strategies
  • Guarantee education of consumers and future
    consumers

16
How this is put into practice Examples of Ghana
17
  • Large outreach, cost-effective
  • Frequent short messages constant educational
    mechanism
  • Key areas loans, savings, consumer rights
  • Endorsed by MoFEP and BoG

Clients
  • Topic operations
  • Specific areas of loans (collateral, guarantee,
    interest rate calculation)
  • Different types of savings

18
Awareness level Road Show
In collaboration with GHAMFIN and the other apex
bodies of the MFIs the Financial Literacy and
Consumer Protection Campaign was organized using
road shows (2007-2009).
19
Knowledge level Client educational materials
developed
  • In collaboration with GHAMFIN clients educational
    materials on savings and loans in the form of
    posters and pocket guides were developed.

DO NOT TAKE A LOAN IF YOU DO NOT NEED ONE
20
Knowledge level ABCs of
  • SPEED Ghana in collaboration with GHAMFIN
    and other development partners developed
    ABCs of
  • Savings
  • Loans
  • Investment
  • Insurance
  • in the form of posters, brochures and pocket
    guides.

21
Knowledge level Radio Programme
SPEED Ghana in collaboration with the Apex Bodies
of the MFIs organized a Financial Literacy
programme using radio (2009 - 2010)
First 5 weeks - savings
Last 5 weeks - loans
  • Held once a week on each radio station
  • Use local languages Ga, Twi and Ewe
  • Theme Money matters
  • For each event
  • Jingle
  • Drama
  • Panel discussion
  • Phone-in section (question and answers)

22
Introduction of Financial literacy in schools
  • Done the curricula for SHS has already been
    revised and topics to be included have been
    identified
  • Currently working on the development of content
    under each topic
  • Next steps
  • Development of training materials for the
    teachers and students
  • Training of the teachers
  • Piloting in 20 schools
  • Rolling out national programme

23
Examples from Ghana financial institution level
24
Training modules for MFIs
  • In collaboration with ACCION International
    training modules were developed for the MFIs in
  • client service/customer care
  • sales and promotion
  • The modules were pilot-tested in six MFIs
  • Training for loan officers (3 days) and
    management (2 days)

Ghana Income Map Source Country Economic
Memorandum 2006
25
Training modules for the Financial Institutions
Client Service
1. Type of clients 2. Client Protection Definition, Importance of client protection to MFI, 6 Smart Campaign Principles 3. Client Service What is client service, Why MFIs should to focus on client service 4. Connection between client service and client protection 5. A loyal client Who is a loyal client, Benefits of a loyal client to the MFI, Cost to MFIs for losing clients, Why clients leave/switch to another institution 6. Client satisfaction Why satisfied clients are important, Needs of MFI clients, Tools for measuring client satisfaction 7. Factors that impact on the level of client service 8. Role of managers in client service 9. How to provide excellent client service 10. Principles of communication 11. How to handle client complaints
26
Training modules for the Financial Institutions
Sales and Promotion
1. Financial Product What is it? Types of financial products Features of a financial product Link between product features and client needs Tools and techniques for explaining savings and loan products to clients
2. Financial Literacy Definition and objectives Why clients need financial literacy What are the benefits for an MFI that provides Financial Education Basic Financial Concepts - Cash flow, Budget
3. Sales and Promotion Common policies of sales and promotion Key characteristics of a good salesperson Sales and promotion strategies Stages of sales and promotion
27
Examples from Ghana Regulator and Government
Level
28
National Strategy for Financial Literacy and
Consumer Protection in the Microfinance Sector
29
Consumer Protection is complementary
  • Survey on the current status of CP in Ghana
  • Objective understand the level of knowledge of
    clients and institutions
  • In line with national strategy FINSSP II
  • ToR to be shared with MoFEP and BoG (ICRO)

Presentation to stakeholders
Improvement of Code of Conduct and agreement with
stakeholders on minimum standards
Review and improve complaint mechanism with ICRO
and associations
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