Abstract

Introduction – In 2003, when Microfinance Opportunities and Freedom from Hunger partnered to develop a financial education curriculum for the microfinance industry, there was very little experience with financial education for low-income populations in developing countries—and most specifically, for microfinance institution clients. Microfinance Opportunities joined with Freedom from Hunger to launch the Global Financial Education Program to respond to this gap. The education development was a grassroots effort that started with market research in which clients shared their financial goals and challenges, and their current knowledge, skills, attitudes and practices as related to managing money. As a result of this program, a unique curriculum tailored to lowincome populations in developing countries was developed. Within two-and-a-half years, approximately 350,000 microfinance clients have received training in financial education, and 19 million have had access to some of the key education messages presented through radio, television, print and street theater.

While many basic principles of money management are universal, financial knowledge, experience and behaviors vary widely across individuals, households and populations. For example, young people have much less experience to draw on than older people; wage employees with a regular flow of income may be more regular savers, or rural populations may have much less exposure to formal banking institutions. There is still much to learn about which types of financial education are needed by whom, which methodologies are most effective in improving knowledge, skills, attitudes and practices, and how financial education can be combined with other opportunities to reinforce long-term behavior change.

To date, most of the experience with financial education has been in the developed world, and the jury is still out on whether financial education leads to positive behavior change. The purpose of this document is to explore our understanding of the role that financial education in developing countries can play in the lives of microfinance clients. It briefly reviews the existing literature on the outcomes of financial education in developing countries and highlights the lessons from financial education programs of three microfinance organizations: CRECER and Pro Mujer in Bolivia and SEEDS in Sri Lanka.