Financial Literacy : Who’s Responsibility? (Samadanie Kiriwandeniya)

By Microfinance Focus, on October 14th, 2010

Microfinance Focus, October 14, 2010 (Colombo) : Samadanie Kiriwandeniya from SANASA shared her thoughts on Sri Lankan developments. She said, ” Good morning, the theoretical aspects of financial literacy has been covered very widely and is quite relevant to the Sri Lanka context. Just to share with you, SANASA Development Bank began as a cooperative society. Cooperative societies has been in Sri Lanka for over 30 years. Cooperative societies are like people who come together, alittle like SHGs but slightly bigger, coming together to do banking activities and putting their credit together to form a pool. So SANASA began like this, and gradually learnt to keep records and training members on personal finance. This is the common foundation of MFIs that is seen across the globe.

Financial literacy is not a new concept . I think we need to take a step back and ask ourselves why we are doing microfinance and who are we to do microfinance. There is a need to increase savings and assets base, to graduate clients from pure borrowing, and moving them beyond credit. I think it has to start from the beginning – financial literacy – letting the poor know how to save, how to mobilise funds, where to bank their money, how to not get trapped by finance products etc. It is no longer proximity banking but banking through technology. Just to share some SANASA experience, most of the banks in the country have no credit fund for informal sectors. Hence, there are thousands of informal credit funders with 40% of the clients being young people. If we are thinking of the future generation, we need to link these people to the formal market and educate them. It begins from the beginning – you cannot have financial literacy later, you have to think of where you want to take your clientele now.

Last segment that I’d like to mention, the school sector, unlike western country, I think in Sri Lanka, we are not taught about petty cash/pocket money. I think teaching children to be responsible from the school level is a good start.

Paula Bennett: Youhave reminded me that we should think about when education about finance should start – As soon as a child asks for money, you should start financial literacy. So all parents out there please keep that in mind.