Financial Capability
Financial Capability Framework
The Abilities
Generating, Managing and Using Money
Planning for the Future
How households generate income
How households invest
How households handle money
How households plan for the future
How households spend money
FINANCIAL CAPABILITY
Using Financial Services How households use loans
Using Social Capital, Assets and Competencies
How households save
How people interact within family and community
How households use bank accounts
How households use assets
How households use insurance
How households gain knowledge and skills
Meet the Family
Game of Financial Life
0-
rs a e 5y Using c n ial Servi Fina ces Abil ity to
t
Abilit y to
plan for the
fut ur
e
A
y/wisely sibl on sp
ts sse ea
Genera t & Us ing, i n g M Ma o me co
edge and skills owl kn in
to ha n
to spend mo ne ility yr Ab e
nerate suf f ici en o ge ti yt n lit
1 00 1 00
ts se As s ie
Ability
r se re ev b r se na re k ev o i f nab dn ai i fo k n aid
1 00 1 00
011 00
r se re ev b r se na re ok ev i f nab dn ai i fo k n
aid
011 00
r se re r ev se b re na b ev o k k na if dn i fo ai idn a
r se re r ev se b re na b ev k o k na if dn i fo ai idn a
1 00001
6-1 0
s ar ye
us
g gin na ey n
life ity un m
Abilit y to
ga
1 00001
com
ney on daily basi mo s dle
participate in
y to ilit Ab
to ity bil
Abilit y to
Ab i
ars e y
co
Using Social C and Com apita p e ten l, c
Ability to
inv es
ac
ithin the f am ate w ily din or
Planning f the Futu or re
s oan el us
rance nsu ei us
The young family lives in the village of Icchapur with his father, who is 50 years old and his mother who is 47 years old.
ity to use ba Abil nk
ts un co
Abil ity to
lity to save Abi
1115
The family will soon have a new addition, their new born son.
5 s ar ye
16 -2
A young villager of 27 years is married to his 24 year old wife. They have one child, their 5 year old daughter.
0-5 years Floods in Icchapur
New Born Child
Increased health care Unemployment Loan against land from informal money lender Improvement in health
Loan Repayment
Migrant Life
No source of stable income Mounting debt Migration to city in search of job
Construction work in city Crop & house damage
Without support of husband
Loss of income
Regular remittances
Illness in thew family
Improvement in living conditions
Tensions in thefamily
Admit daughter in school
Axiety around soon to be born child GENERATING, MANAGING & USING MONEY
GENERATING, MANAGING & USING MONEY
GENERATING, MANAGING & USING MONEY
USING SOCIAL CAPITAL, ASSETS & COMPETENCIES
USING SOCIAL CAPITAL, ASSETS & COMPETENCIES
USING FINANCIAL SERVICES
USING FINANCIAL SERVICES
GENERATING, MANAGING & USING MONEY
USING SOCIAL CAPITAL, ASSETS & COMPETENCIES
PLANNING FOR THE FUTURE
USING FINANCIAL SERVICES
USING SOCIAL CAPITAL, ASSETS & COMPETENCIES
6-10 years Member of Self Help Group
Loss of Remittance
Training & loan through SHG
Health issues
Vocational training 00 00 1 1
Loan to buy sewing machine
a aiidni dn fo if kn o k ab e na vr es b ev er re se r
Home business picks up
0000 11
ai aid dn ni i f fo k o n k na ab e vr b es ev er re se r
00001 1
Managing house by herself
Support from mother in law to look after children
Father in law’s drinking problem
Remittances increasing because of better job
Join the village shg
Money stolen in transit
Regular savings & better money management
Open bank account
Drinking problem of fil becomes a health issue
Safer and regular transfer of funds
Boy admitted in school
Irresponsible spending
Social Capital, Assets & Competencies > Ability to coordinate within the family
Generating, Managing & Using Money
Social Capital, Assets and Competencies
Using Financial Services
> Ability to generate sufficient income
> Ability to gain knowledge & skills
> Ability to use insurance
Generating, Managing and Using Money > Ability to spend responsibly/wisely
Using Financial Services
Social Capital, Assets and Competencies
Social Capital, Assets & Competencies
> Ability to use a bank account
> Ability to coordinate within the family
> Ability to use coordinate within the family
Generating, Managing and Using Money > Ability to handle money on a daily basis
Social Capital, Assets and Competencies
Using Financial Services
> Ability to participate in community life
> Ability to use a loan
Planning for the future > Ability to plan for the future
Planning for the Future
Using Financial Services > Ability to save
Social Capital, Assets & Competencies
Social Capital, Assets & Competencies > Ability to participate in community life Social Capital, Assets & Competencies > Ability to gain knowledge and skills
> Ability to invest > Ability to use assets
11-15 years Accident
Medical expenses
Small business
Husband badly injured in accident
Electrical repair shop for husband
Returns home to recover
Loan from shg by showing financial planning
Daughter drops out of school
Thinking about future Business doing well Home improvements & better education for kids Small health insurance
Wife helps husband stabilise business
Private pension fund Extra savings for daughter’s wedding
Medical expenses met partially through savings & emergency loan from shg Pension for father in law as he turns 60
00 01 1 0
er aidni fo k nab evres aidni fo k nab e vreser
000011
001 001
er aidni fo k nab evres aidni fo k nab e vreser
Generating, Managing & Using Money
Social Capital, Assets and Competencies
Generating, Managing & Using Money
Generating, Managing & Using Money
> Ability to generate sufficient income
> Ability to participate in community life
> Ability to generate sufficient income
> Ability to generate sufficient income
Generating, Managing & Using Money
Using Financial Services
Planning for the Future
Social Capital, Assets & Competencies
> Ability to spend money wisely
> Ability to use loans
> Ability to plan for the future
> Ability to use assets
Social Capital, Assets and Competencies
Social Capital, Assets & Competencies
Social Capital, Assets & Competencies
> Ability to coordinate within the family
> Ability to coordinate within the family
> Ability to gain knowledge
Social Capital, Assets and Competencies
Social Capital, Assets & Competencies
Planning for the Future
> Ability to gain knowledge and skills
> Ability to participate in community life
> Ability to invest
Planning for the Future
Using Financial Services
> Ability to invest
> Ability to use insurance
Using Financial Services
> Ability to use a loan
16-20 years Father’s funeral expenses
Where do you think they are going ?
Son’s higher studies
Daughter’s wedding
Build house
Self Assessment & Goal Setting Ability to generate sufficient income
Ability to use bank acconts
Ability to spend money responsibly / wisely
Ability to use insurance
Ability to handle money on daily basis
Ability to coordiante wihtin the family
Ability to plan for the future
Ability to participate in community life
Ability to invest
Ability to use assets
Ability to use loans
Ability to gain knowledge and skills
Ability to save
Published By Deutsche Gesellschaft F端r Internationale Zusammenarbeit (GIZ) Gmbh Rural Financial Institutions Programme C o n ta c t Dr. Detlev Holloh, GIZ Programme Director A-2/18, 4th Floor, Safdarjung Enclave, New Delhi 110029 India T : +91 11 49495353 F : +91 11 49495393 E : Detlev.Holloh@Giz.De W : Giz.De C o n c e p t a n d L ay o u t Quicksand and Design Route Responsible Dr. Detlev Holloh New Delhi, March 2014