Resource Library

Bridging the Gap: The Business Case for Financial Capability Brief

This brief summarizes the findings from a report on the lack of financial literacy among the large numbers of people who have access to financing. It is estimated that 500-800 million of the world's poor now have access to finance; however, only 110-130 million of that number have had any sort of financial capability training. In many cases, financial institutions that serve low-income customers view financial education as a cost center rather than a strategic investment. The brief discusses different financial institutions' approaches to financial education, and the need for new models that reach more people, are affordable and scalable, and are tailored toward the evolving models of access to finance now available to low-income customers, such as mobile banking. It also reviews the risks of having large numbers of people who are able to access financing but who do not have a strong understanding of the products they are purchasing. This brief is intended for program managers and people interested in low-income financing and microfinance. Read the full report.