By Megha Rana
The demand for financial literacy in Africa is huge. The number of programs is small. For those that do exist, the goal is to educate those in poverty so they can begin to build financially stronger and smarter lives. However, as you review these programs, note that they are designed for those who do have a relatively stable income, living above the world poverty index of $1.90/day. There do not appear to be many financial education programs designed for this level of poverty.
The National Financial Educators Council (NFEC) is an independent organization that helps people of all ages and income levels become financially literate. Their Curriculum Advisory Board is made up of expert financial educators who design engaging, fun, relatable courses for low-income adults and families. This program consists of an 8-week course that is taught 4 hours a week, with a curriculum based on a timeline that can be adjusted to help faster or slower students. The lessons are practical and offer incentives that help students take real-world actions to improve their finances. The National Financial Educators Council is an independent organization so there are no outside financial institutions influencing or benefitting from their work – banks, independent lenders, etc.
The Center for Financial Literacy Education Africa (CFLE Africa) is a not-for-profit social organization in Ghana that seeks to promote and develop financial literacy skills in the average Ghanaian and as well as other Africans. Their mission is to empower and educate all Ghanaians (and other Africans) to make financially sound decisions, develop and promote financial literacy skills in young people for successful living, dramatically expand financial awareness and financial literacy education, and recognize and unite organizations and individuals who are championing improving financial awareness and literacy.
Ghana has a population of nearly 30 million, with an employment rate of about 41% and an unemployment rate near 6.8%. However, this leaves over 3.9 million Ghanaians in such dire poverty they cannot afford three meals a day for themselves and their family. Many are struggling to survive on less than $1.90 PPP (Purchasing Power Parity) or $1 per day. They are not taught about planning for their future either at school or at home nor do they learn why it is important to have a current financial plan to protect themselves and their families. As a result, this level of endemic poverty has led to a serious financial illiteracy epidemic.
CFLE Africa has created the “Improving Financial Awareness and Financial Literacy Movement in Ghana.” Their strategy is to first take an active role in recognizing thought leaders and stakeholders who are or should be working towards improving financial awareness and financial literacy. The second step is to unite them with other associations, non-profits, and/or organizations to focus their community resources on building concentrated media campaign venues. For instance, April is now known as Financial Literacy Month in Ghana.
This movement began in March 2018, when Peter Kwadwo Asare Nyarko, Executive Director of CFLE reached out to the Financial Awareness Foundation (TFAF), a USA based non-profit organization. He shared his vision for Ghana and Africa, where every person in Ghana is financially aware and financially literate, and an Africa where people are financially empowered and educated to make their own personal financial decisions.
Another organization, CARE, is a global leader with a worldwide mission to end poverty. Their “POWER Africa” project (Promoting Opportunities for Women’s Economic Empowerment in Rural Africa) aims to increase financial inclusion for 480,000 individuals and their families through savings groups, financial education, and linking mature groups to formal financial institutions. Their focus is on the poorest households in rural areas within Burundi, Côte d’Ivoire, Ethiopia, and Rwanda, as these areas are significantly excluded from financial services.
POWER Africa, which ran from 2014-2017, was focused on female-headed households in rural and peri-urban areas. They worked across the financial inclusion ladder to link women to formal financial services. By the end of the project, 12,542 groups with a combined membership of more than 353,000 were linked to formal financial services. In addition, another 162,000 individuals (who were not part of the combined memberships) were also linked to formal financial services. Of these unaffiliated individuals, 71% of them were women.
Programs such as CARE, NFEC, and CFLE are particularly important because they do not have a stake in any financial institution or sponsored financial vehicle. They are not interested in increasing the number of depositors at any one bank or, as is often the case, uninterested in rural areas which lack banking facilities. Instead, these programs cater to rural African culture with varied teaching timelines, flexible program hours, and fluid programming to fit the concerns of participants in specific communities. They are truly creating social impact by helping those in poverty and/or poor financial situations, empowering them to make financial stability a reality.
Sources:
https://www.financialeducatorscouncil.org/financial-literacy-for-low-income
https://cfleafrica.org/the-movement/