Financial literacy: What for?

In preparation for the 2015 Global Forum on Development, which will focus on how access to financing can contribute to inclusive social and economic development, the OECD Development Centre and the United Nations Capital Development Fund (UNCDF) have developed a series of articles exploring the key issues and dimensions of financial inclusion. Today’s post from Sarah Bel of the UNCDF Better Than Cash Alliance and James Eberlein of the OECD Development Centre highlights some of the overarching themes related to financial literacy.

Most of our problems are based on finances. Money is always an issue. I have to still provide for both my parents who are not working and make sure they are fed; I must pay their insurance policies because they no longer have the ability to pay them. I don’t earn enough money to afford all of that. A 35-year-old man from Lesotho, interviewed as part of the UNCDF Making Access Possible initiative

Have you ever tested your financial literacy? Read what follows and you’ll get a better sense of why this matters more than you may have thought.

Low-income consumers must make complex financial decisions even more frequently than middle or high-income consumers, given their smaller operating margins and their limited and irregular incomes. A forthcoming report by UNCDF on Lesotho and Swaziland shows that many workers forfeit up to 40% of their income because of burdensome loan repayments. Indebtedness in the informal consumer market is often an indicator not only of poverty, but also limited financial literacy.

Yet these problems are not limited to poor consumers or...READ MORE AT OECDINSIGHTS.ORG

Originally published on oecdinsights.org

Useful links

OECD work on inequalityinclusive growthfinancial education and consumer policy

UNCDF Making Access PossibleYouthStart and Better than Cash Alliance initiatives and Pacific Financial Inclusion Programme

FinMark Trust Financial Education Toolkit




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