Do the poor need financial literacy?

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September 09, 2010

Olga Morawczynski is Project Manager for Grameen Foundation's financial literacy project in Uganda.

When I started the financial literacy project at the Grameen Foundation in Uganda, I was faced with some very fundamental questions—what exactly is financial literacy? And do the poor really need it, or even want it? Aside from my own questions, I also faced some reservations from colleagues in the field.  Many were very frank in their opinions. There is no need for financial literacy, they told me. What the industry needs is appropriate financial products. The learning bit will take care of itself.

I have spent the last months travelling around Uganda and speaking with individuals who depend on a wide variety of livelihoods, from fishing to trading and farming. And I have made some extremely interesting discoveries. Amongst the people I spoke to, there was a clear demand for financial information. Many of my informants did not have a lot of money, and their inflows of cash were extremely irregular. But they had many questions on how to manage it better. A significant portion wanted advice on savings and budgeting. As one farmer explained, “when you have so little, you have to become an expert at managing it. If not, it will disappear from your hands before you even had the time to count it”.

But what makes one an expert at managing their cash? “When times are good, you put cash away”, the farmer explained. “So when the cash is not flowing, you have something saved”. I asked what happens if you don’t have something little saved. The farmer pointed to a small herd of his cows. “You sell one of them”, he said. So maybe that brings us a little bit closer in our understanding of what financial literacy is and what it should do. That is, helping people to plan accordingly so they are prepared for the periods of cash deficits.  And when you are an expert, you get to keep your cows.


Greetings from the United States;

I would have to say, take a look at the Native American Indians. Look at my race and you will see that Financial Literacy is essential to move into financial prospects; such as the Real Estate business or the Grocery Industry.

Financial literacy in Uganda hasn't been given the attention it deserves. A good number of the rural poor have lost the little they have because of borrowing from the mushrooming village banks and saccos. Neither the borrowers nor the lenders are financially literate. No lending should be effected if source of repayment cannot be ascertained yet currently the most important consideration is that if you have some property then it is ok. This approach has not only impoverished the rural communities but also scared them from further borrowing. Educate both borrowers and lenders to realise maximum benefits from microfinance.
John Muhimbise

Financial literacy is absolutely necessary not only for the poor but also for the rest of the population. Can you imagine that Uganda's savings levels are categorised as the lowest in Sub-Saharan Africa? Yet savings drive investment and that's why we remain poor!

We are so glad to know your project proposal, we are praying for you. Thank you.

Kaihen moderator
email:rcgmission [at]

Well, you've explained what financial literacy is; will you also enlighten us about the tools used to make the poor better money managers?

I think the poor need financial literacy since it is due to their little money that they have to learn how to budget for it in order to survive and may be later save some money and get out of poverty. It is crutual becoz of various reasons.

This is from "Engedi Foundation" Regd. 2001. We are now propose a project on basic education for destitute children's, so, please kindly help me the way to get funds for said project. Thank you.

Khupkam vaiphei
Engedi Foundation.

I am a member of Hope Foundation but am very disappointed that Grameen Foundation can come on my home soil and i miss such a great opportunity to offer them my contribution towards the financial literacy cause for my dream is in changing lives through financial empowerment. pliz i beg for your cooperation with me


I have been a fan of the Grameen Foundation since I have read Dr. Yunus' book, "Banker to the Poor." It has inspired me to do my part to our society. We have here some initiatives going on, but still very unpopular. I desired to have a big change in our country.

I am now a part of a group who teaches financial literacy to Filipino people here in the Philippines. We're teaching participants to use non-monetary approach to enterprise building. I hope we can make some "dent" in improving the quality of life amongst our poor.


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