GIZ Financial Literacy Ghana by IJbF45

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									                                                                      Responsible Finance
                              Banking Supervision, Financial Literacy and Consumer Protection




               Financial Literacy - The Case of Ghana
                      Process and Levels of Intervention




                                December 2011




Prepared by: Maria Vitores - Team Leader Responsible Finance, maria.vitores@gopa.de
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                                                             Responsible Finance
                     Banking Supervision, Financial Literacy and Consumer Protection



Key aspects of a successful Financial Literacy Initiative

 1. Process of integration of              2. Intervene at all
    all relevant stakeholders                 levels




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                                                  Responsible Finance
          Banking Supervision, Financial Literacy and Consumer Protection




Process




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                                                                Responsible Finance
                        Banking Supervision, Financial Literacy and Consumer Protection


In order to succeed, the process of any Financial Literacy Initiative
must be:


                Inclusive and Participatory




How does this translate to reality?

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                                                                   Responsible Finance
                           Banking Supervision, Financial Literacy and Consumer Protection


In Ghana an informal working group was formed and steered by
SPEED (a GIZ and DANIDA project).

Initially, members were:                 Currently, the members are more:

                                            • Ministry of Finance
  • Ministry of Finance                     • Credit Union Association
  • Credit Union                            • Ghana Microfinance Network
    Association                             • Association of Rural Banks and
  • Ghana Microfinance                        its APEX Bank
    Network                                 • Bank of Ghana
  • Association of Rural                    • All the apex bodies (Financial
    Banks and its APEX                        NGOs, Susu collectors, Money
    Bank                                      lenders, Ghana Education
                                              Service)


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                                                                Responsible Finance
                        Banking Supervision, Financial Literacy and Consumer Protection


The role of the working group is to be a platform for discussion
and development of Ghana’s activities under financial literacy.

                                                    This includes:
                                                    • Identification of
                                                      problems
                                                    • Development of a
                                                      plan of activities
                                                    • Approving the
                                                      materials to be
                                                      used and other
                                                      initiatives
                                                    • Implementing the
                                                      strategy

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                                                               Responsible Finance
                       Banking Supervision, Financial Literacy and Consumer Protection


How did it work in Ghana: within the meetings of the working
group several decisions were taken.

                                                    Key issues related to
                                                     financial literary and
                                                     development of what
                                                     “key messages”
                                                    Type of educational
                                                     material to be
                                                     developed and
                                                     approval of content
                                                    Radio programme
                                                     development
                                                    Finally, the Financial
                                                     Literacy Strategy for
                                                     Microfinance sector

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                                                                 Responsible Finance
                         Banking Supervision, Financial Literacy and Consumer Protection



Positive elements

Consensus on how to                               Stronger commitment
address problems                                  from all parties




All initiatives related to                Shared responsibility in
Financial Literacy are                    addressing the issues (all of them
                                          will contribute to implementing their
coordinated                               respective environments)
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                                                                Responsible Finance
                        Banking Supervision, Financial Literacy and Consumer Protection



Challenges

Decision process takes longer

                                                    Attribution of roles

Sustainability
(in Ghana’s case not yet solved)

                                                                  Budget

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                                                   Responsible Finance
           Banking Supervision, Financial Literacy and Consumer Protection




For a coordinated national strategy on
Financial Literacy it is a key success factor
to have a platform of discussion formal or
informal where all stakeholders are
represented.




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                                                        Responsible Finance
                Banking Supervision, Financial Literacy and Consumer Protection




Levels of intervention




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                                           Responsible Finance
   Banking Supervision, Financial Literacy and Consumer Protection




Regulators and Government



   Financial institutions
     and Apex bodies


         Clients and
         consumers


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                                                             Responsible Finance
                     Banking Supervision, Financial Literacy and Consumer Protection


Financial Literacy – Client Education

  KEY AREAS                                          OBJECTIVES

  1. Client is informed:                             1. Awareness
     client education                                2. Knowledge &
  2. Client is able to                                  Understanding
     make appropriate
     decisions                                       3. Changing
  3. Client knows                                       Behavior
     rights and uses
     them: consumer
     protection


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                                                                 Responsible Finance
                         Banking Supervision, Financial Literacy and Consumer Protection


Financial Literacy – Institutions and apex bodies

  KEY AREAS                                              OBJECTIVE

  1. Understand the
     client                                              Better practices
  2. Protect client
  3. Adequate
     costumer care
  4. Take up
     responsibility in
     client education
  5. Establish
     standards
     (through self-
     regulation)
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                                                          Responsible Finance
                  Banking Supervision, Financial Literacy and Consumer Protection


Financial Literacy – Public Sector

  KEY AREAS                                       OBJECTIVE

  1. Protect and
     inform                                         Strong and
     consumers well                                 protected
  2. Develop adequate                               financial sector
     policies and
     strategies
  3. Guarantee
     education of
     consumers and
     future consumers

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                                                        Responsible Finance
                Banking Supervision, Financial Literacy and Consumer Protection




How this is put into practice:
Examples of Ghana




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                                                              Responsible Finance
                      Banking Supervision, Financial Literacy and Consumer Protection


• Work through
  financial                                    • Large outreach, cost-effective
  institutions                                       • Frequent short
• Areas: Loans,                                         messages: constant
  Savings, How to                                       educational mechanism
  bank              DVD/              Radio                • Key areas: loans,
                                                             savings, consumer
                    audio                                    rights
                                                              • Endorsed by
                                                                MoFEP and

                         Clients                                BoG




                    Schools           Printed                • Topic: operations
                                                           • Specific areas of
• Integration of                      Material             loans (collateral,
  financial
  literacy in                                              guarantee, interest
  Senior High                                              rate calculation)
  Schools                                    • Different types of savings
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                                                                Responsible Finance
                        Banking Supervision, Financial Literacy and Consumer Protection


Awareness level – Road Show
In collaboration with GHAMFIN and the other apex bodies of the MFIs
the Financial Literacy and Consumer Protection Campaign was
organized using road shows (2007-2009).




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                                                                  Responsible Finance
                          Banking Supervision, Financial Literacy and Consumer Protection


Knowledge level: Client educational materials developed
  In collaboration with GHAMFIN clients
  educational materials on savings and
  loans in the form of posters and pocket
  guides were developed.

                            DO NOT TAKE A LOAN
                          IF YOU DO NOT NEED ONE




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                                                                  Responsible Finance
                          Banking Supervision, Financial Literacy and Consumer Protection


Knowledge level: ABC’s of …
SPEED Ghana in collaboration with GHAMFIN
and other development partners developed
ABCs of
1. Savings
2. Loans
3. Investment
4. Insurance
in the form of posters, brochures and pocket guides.




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                                                                Responsible Finance
                        Banking Supervision, Financial Literacy and Consumer Protection


Knowledge level: Radio Programme
SPEED Ghana in collaboration with the Apex Bodies of the MFIs
organized a Financial Literacy programme using radio (2009 - 2010)


  First 5 weeks - savings       Last 5 weeks - loans

  Held once a week on each radio station

  Use local languages: Ga, Twi and Ewe

  Theme: Money matters
  For each event: •   Jingle
                   •   Drama
                   •   Panel discussion
                   •   Phone-in section (question and answers)



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                                                              Responsible Finance
                      Banking Supervision, Financial Literacy and Consumer Protection


Introduction of Financial literacy in schools

Done: the curricula for SHS has already been revised and topics to
be included have been identified

Currently: working on the development of content under each topic

Next steps:
  1. Development of training materials for the teachers and
     students
  2. Training of the teachers
  3. Piloting in 20 schools
  4. Rolling out national programme


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                                                          Responsible Finance
                  Banking Supervision, Financial Literacy and Consumer Protection




Examples from Ghana:
financial institution level




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                                                                 Responsible Finance
                       Banking Supervision, Financial Literacy and Consumer Protection


Training modules for MFIs

 In collaboration with ACCION
  International training modules
  were developed for the MFIs in
   1. client service/customer care
   2. sales and promotion
 The modules were pilot-tested in
  six MFIs
 Training for loan officers (3 days)
  and management (2 days)


                                                                                  Ghana Income Map
                                                         Source: Country Economic Memorandum 2006

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                                                                            Responsible Finance
                                  Banking Supervision, Financial Literacy and Consumer Protection


Training modules for the Financial Institutions
Client Service
1. Type of clients
2. Client Protection
Definition, Importance of client protection to MFI, 6 Smart Campaign Principles
3. Client Service
What is client service, Why MFIs should to focus on client service
4. Connection between client service and client protection
5. A loyal client
Who is a loyal client, Benefits of a loyal client to the MFI, Cost to MFIs for losing
clients, Why clients leave/switch to another institution
6. Client satisfaction
Why satisfied clients are important, Needs of MFI clients, Tools for measuring client
satisfaction
7. Factors that impact on the level of client service
8. Role of managers in client service
9. How to provide excellent client service
10. Principles of communication
11. How to handle client complaints
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                                                                       Responsible Finance
                               Banking Supervision, Financial Literacy and Consumer Protection


Training modules for the Financial Institutions
Sales and Promotion
1. Financial Product
  What is it?
  Types of financial products
  Features of a financial product
  Link between product features and client needs
  Tools and techniques for explaining savings and loan products to clients
2. Financial Literacy
  Definition and objectives
  Why clients need financial literacy
  What are the benefits for an MFI that provides Financial Education
  Basic Financial Concepts - Cash flow, Budget
3. Sales and Promotion
  Common policies of sales and promotion
  Key characteristics of a good salesperson
  Sales and promotion strategies
  Stages of sales and promotion



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                                                       Responsible Finance
               Banking Supervision, Financial Literacy and Consumer Protection




Examples from Ghana:
Regulator and Government Level




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                                                            Responsible Finance
                    Banking Supervision, Financial Literacy and Consumer Protection

National Strategy for Financial Literacy and Consumer
Protection in the Microfinance Sector




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                                                              Responsible Finance
                      Banking Supervision, Financial Literacy and Consumer Protection


Consumer Protection is complementary

Survey on the current status of CP in Ghana
• Objective: understand the level of knowledge of clients and
  institutions
• In line with national strategy FINSSP II
• ToR to be shared with MoFEP and BoG (ICRO)


      Presentation to stakeholders

         Improvement of Code of                     Review and improve
         Conduct and agreement with                 complaint mechanism
         stakeholders on minimum                    with ICRO and
         standards                                  associations
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