Financial Literacy: A Step for Clients towards Financial Inclusion

the beauty salons -- to reduce these expenditures and have a little to save (Hopkins,
2007).
• In India, FINO provides technological and operational solutions that enable
financial institutions to serve low-income populations. Its key product is the
biometric smart card which can be used for opening and managing bank savings
account. However, to date, usage rates among accountholders are low (15%);
instead, most frequently save at home in small amounts and invest in gold/jewelry
as a hedge against emergencies. What explains these low rates of card usage?
Market research provided the following answers. With respect to the new smart
cards, clients:
• Do not trust that their money is secure
• Are not sure if the smart card is a debit or ATM card
• Do not know if it earns interest
• Perceive that the cards are tied to a government program
• Do understand that the agent or ‘bandhu’ is linked to bank
Market research also revealed that there are many contact points with the agent or
’bandhu’. Each one provides an opportunity or ‘teachable moment’ to build the financial
capabilities of the consumer. In this circumstance, the financial education product of
choice is a ‘flip book’ that guides both the bandhu and customer along a conversation
path (Microfinance Opportunities, 2010).
• For potential insurance clients, a significant misunderstanding lies in the need to
renew the policy if no claims were made during the policy year. Some clients
expect to get their premium refunded in the event of no claims. Curriculum to
impart information about insurance therefore targeted the concept of pooled risk,
starting with local mutual aid practices that operate on similar principles but may
be more familiar to potential clients.
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