Global Financial Education: A Strategy to Advance Microfinance

Abstract

The research was financed by ESADE Business School (Sponsoring the researcher in his PhD studies)'

Abstract

There is growing evidence that microfinance institutions (MFIs) have substantial benefits for consumers, especially women in financial inclusion. Several attempts have been made to explain why MFIs have not been able to bridge to financial inclusion. Prior research has addressed the reasons why globally; two-thirds of adults do not have an account. However, little is known about the role of financial education that leads to financial literacy especially regarding the method, mode, form and subject. This study proposes Global Financial Education (GFE)that would lead to financial literacy among MFI clients in order to empower them to select appropriate MFIs, MFI products and services, right channels for greater financial inclusion. We propose a practical mode of implementing GFE. This is likely to propel financial inclusion as opposed to merely access to credit through informal financial institutions where clients are caught in a vicious cycle of poverty, unable to transition to middle class status.

Keywords: Financial Inclusion; Financial Literacy; Global Financial Education; Micro-Financial Institutions;

DOI: 10.7176/JPID/55-05

Publication date:August 31st 2020