India is one of the fastest growing economies in the world whose population is expected to reach 1.5 billion by 2028. As a country with diverse backgrounds, India faces unique challenges like financial literacy being one of them. Financial illiteracy results in individuals lacking knowledge about how to manage their money and make sound financial decisions.
This lack of financial literacy can lead to disastrous events such as an individual not understanding that they should invest or borrow in order to conquer some hardship or be able to provide for themselves and their loved ones, unaware that saving for a future short-term goal could be detrimental until it’s too late.
There have been various attempts to tackle the lack of financial literacy in India. During the year 2000, the World Bank announced an initiative called Project 360 which aimed to achieve a countrywide financial literacy by 2020. A lot of strides have been made and there is still much work to be done.
Challenges In India For Financial Literacy
A unique challenge India faces is that unlike most countries in the world where financial literacy is taught in schools or at home, India does not have a formal system of financial education. The Indian government has taken steps towards making financial literacy an important aspect of its education curriculum by teaching kids about money and finance in schools and dedicated Financial Literacy Centers (FLCs).
What Will The Benefits Of Financial Literacy In India?
Financial literacy will help India become a self-sufficient and strong nation. It is necessary for individuals to understand their financial responsibilities in order for them to make sound decisions that impact them, their families, and their future generations.
According to The Economist Intelligence Unit, 56% of Indians are financially illiterate compared with 41% globally (in 2014). Among Indian women and urbanites, this figure rises up to 80%. However, among the Indian male population, the figure drops to 55%.
According to a report published by The World Bank, in India, less than 10 percent of women have been educated in relation to the financial concepts (i.e. purchasing power parity) needed for making sound decisions regarding their health and what they can afford. Financial literacy for students is an important aspect of any individual student education as it provides them with various options for furthering their financial well-being in order for them to make smart decisions that impact their lives as well as other people’s lives as well.
Some researchers argue that 60% of Indian women lack basic financial literacy skills like using a bank account or understanding interest rates on loans and mortgages. In addition, according to the Global Findex Database, only 32% of adult Indians understood what a bank account could do for them and how to apply for one.
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