fsd's financial education programme: evaluation and ... - FSD Kenya

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20 • FSD’S FINANCIAL EDUCATION PROGRAMME: EVALUATION AND RECOMENDATIONS Annex A Terms of Reference for Financial Education - end of project evaluation FINANCIAL EDUCATION: END OF PROJECT EVALUATION 1. BACKGROUND Over the last 3 years, FSD Kenya has supported a financial education project the objective of which is “to establish the foundations for a comprehensive and sustainable national programme of financial education in Kenya. The vision for a financially literate Kenya encompasses all socio-economic levels and calls for a national programme which aims to: (i) improve Kenyans’ personal financial management practices, (ii) foster effective use of financial services and (iii) advance consumer protection in the financial marketplace. To achieve these goals requires an enabling policy, legal and regulatory framework and a multi-faceted approach to delivery. Recognising the shared responsibility for achieving the vision, a public-private partnership approach was adopted and a taskforce established in 2009 with the responsibility of driving the project. The Financial Education and Consumer Protection Partnership (FEPP) is composed of members from across the public and private sectors. A smaller group was selected to form a taskforce to guide activities. FSD Kenya has been providing the secretariat function through a full-time project manager. Prior to project implementation, a scoping study was undertaken on financial education in Kenya that established the basic content which consumers should know to successfully understand and make informed decisions about their personal finances. The concepts included building basic skills for earning, spending, saving, borrowing and investing. Some work has also been undertaken on consumer protection and transparency including a diagnostic study that identifies key consumer protection issues facing Kenyans as they access financial services. Analysis of the FinAccess 2009 data has also been undertaken to establish the knowledge and skill gaps of Kenyans in management of their personal finances. To reach consumers, a range of delivery channels were selected for pilot work with the aim of establishing practically which approaches would work best to influence positive behaviour change. The four channels selected were: (i) primary schools (ii) the university system, (ii) mass media through television and (iv) directly through formal financial sector providers. These four pilot projects have now been completed and the end line surveys conducted to establish their effectiveness. Subsequent to the initial design of the project, the demand arose from government to develop a new framework for consumer protection in the financial services sector. The project led the development of a diagnostic study which produced evidence based recommendations to the authorities. The project was also strongly linked with two other projects on consumer information which had been established by FSD earlier. Both involved partnerships with the Central Bank of Kenya (CBK). The first entailed creating and publishing a new index to measure the costs of financial services to consumers, while the second looked at options for improving transparency in the presentation of interest rate measures. Both are strongly relevant to the overall objective of FSD’s financial education work. 2. OBJECTIVES To rigorously evaluate the progress made in FSD’s financial education project against its objective and produce evidence based recommendations for future work. 3. SCOPE OF WORK 3.1 Review current global thinking and practice on financial education Financial education has attracted growing interest across both developing and developed economies. Although there has been a consensus that the subject is an important one - in which there is a strong public policy interest - there has been rather less agreement on how it can be achieved. It will be an important background to the evaluation to undertake desk research to gain a clear understanding of the range of current financial education initiatives globally, evidence of impact, new thinking and any emerging international good practices. 3.2 Review all financial education project documents There is a significant amount of background material which needs to be reviewed. Relevant reports include: • • • • • • • • • FSD project appraisal review (PAR) Project scoping study Project plan Project monitoring sheets Minutes of the taskforce meetings Pilot project documentation Consumer protection diagnostic report Financial education curriculum Definition of a standard measure for consumer interest rates in Kenya 3.3 Review financial literacy baseline analysis An analysis was undertaken of FinAccess data to better understand financial literacy in Kenya. This identified three broad categories across the Kenyan population: (i) the struggling excluded, (ii) the disciplined planner and (iii) the engaged elite. Different strategies were proposed to address the financial education needs of these categories. Recommendations were also made for
FSD’S FINANCIAL EDUCATION PROGRAMME: EVALUATION AND RECOMENDATIONS • 21 improving our understanding through future rounds of the FinAccess Retail demand side survey. This work should be reviewed and its value in guiding future strategy assessed. 3.4 Review pilot delivery projects The pilot delivery projects were a key part of the project. Four projects were financed in collaboration with DFID’s Financial Education Fund (FEF): i. Mediae – Makutano Junction – television soap opera; ii. iii. iv. Faulu Kenya – direct client training by a deposit taking micro-finance institutions on financial education training of community based trainers Equity Bank Foundation – training of youth through university student trainers Plan Kenya – primary school curriculum testing. A comprehensive review of each of these pilot projects is required, drawing on the evaluations and impact assessment already undertaken. The aim of this component was to test the efficacy of these diverse channels in building financial literacy and improving financial management practices. In addition to examining the evidence of impact, the review should look at which market segments were reached, the current delivery costs per person reached and the potential scalability of the channel. 3.5 Assess progress towards developing a national framework Recognizing that no single player, government or private sector, would be able to tackle the challenges of improving financial literacy, the project sought to encourage the development of a national framework for financial education. An assessment is required of the progress made towards developing a national framework for building financial literacy. Factors which need to be considered include the degree of engagement by stakeholders and the credibility of the emerging framework measuring in terms of the vision, the prospects for mobilizing the required resources and the potential to deliver real results. 3.6 Review additional work undertaken by the project A number of initiatives were undertaken which had not been anticipated in the original plan. These included: • • • • • an extensive consumer protection diagnostic exercise training of public sector organisations to deliver financial education study of branchless banking and financial capability creation of a financial education website development of a financial education curriculum. Each of these should be reviewed, assessing the strategic relevance to the overall objective, the quality of the work and the evidence of impact. 3.7 Assess the impact of the FEPP The FEPP was established to drive a nationwide ? and undertake key informant interviews with a selected number of stakeholders including: • • • • FEPP Taskforce members Wider FEPP members Governor of the CBK as national financial education champion FSD’s former project manager for financial education. 3.8 Recommendations Drawing on the evidence of what has worked and not worked in this project together with new thinking and evidence from elsewhere in the world on financial education, recommendations should be made for FSD’s future engagement in this field. Strategically, FSD’s emphasis in future work will be on building the financial capabilities of the poor – i.e.: ensuring that impact reaches those on the lowest incomes. Among the key questions which this review should seek to address are: • • • • • • • • • • • Is there any evidence that conventional didactic models really result in behaviour change? Would a focus on improving the quality and relevance of services provided by financial institutions produce greater impact? How scalable are current approaches – is a national vision for financial education realistic in Kenya at the current time? How important is consumer protection and to what extent is this best achieved through improving awareness/caution among consumers or through regulatory oversight and enforcement? Do we need to change our models if we are serious about improving the financial lives of people on lower incomes in Kenya? Is a narrow focus on lower income consumers tenable while still building a national programme? Does the FEPP have a long-term role in building a national programme? How can stakeholders be more effectively engaged in the future – what are the incentives to ensure that key players remain involved? Where can FSD most effectively play a role in stimulating a market-based approach to improving financial capability? How do we synergise existing work within the various themes in FSD? How do we align with Vision 2030?
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