Today, two billion people worldwide lack access to high-quality, affordable financial services, while 200 million small and medium-sized businesses have unmet financing needs. In order to support inclusive growth and stability, financial education is an urgent priority.
Within the realm of financial education, financial literacy is a crucial skill to learn. It equips us with the knowledge needed to effectively manage money. “It includes the knowledge of making appropriate decisions about personal finance,” says Mohammed Moloo, an independent financial consultant with 45 years of international experience.
It comprises “budgeting, investing, insurance, real estate, paying for education, retirement, and tax planning,” adds Mohammed. Without the appropriate attitudes and behaviours, individuals and families are less likely to make sound financial decisions, and eventually succeed in their long-term financial goals.
A direct relationship exists between financial literacy and economic growth. People need this knowledge to make effective financial decisions and actively participate in the economy; while communities as a whole can benefit from financial literacy, to ensure fair and equitable progress of society.
As such, International Development organisations including the World Bank and United Nations (UN) have invested in projects that aim to improve individuals’ financial prospects in various parts of the world.
In the 1990s, the UN developed a new course entitled “Budgeting: Developing a Financial Road Map” for its staff. The aim was to teach how to organise family documents, build savings, identify goals, create and maintain a family budget, and generally improve participants’ money management skills. It began as part of a retirement planning programme but later became available for UN staff of all ages.
The course began to gain in popularity, and other organisations requested the course materials for their constituencies.
Several members of the Jamat participated in the early delivery, and after acquiring new financial skills, suggested it be made available to the wider community. In 2006, the content was released in an ‘open source’ format to the Ismaili Community, through the Jamati institutions.
Today, the content is being delivered to Jamati case managers and volunteers who share their new knowledge and skills with the families they work with, who are improving their economic situation and general quality of life.
The syllabus is designed in a unique and interesting way, explained Razia Laljee, course administrator and lead facilitator, based in the UK. “It is taught through a story of a mentor and a mentee and through experience,” Razia said. The main topics explain three basic steps of forming a budget: 1) getting organised, 2) making a plan, and 3) monitoring the process.
According to course manager Cary Clark, the content has been successful thus far, despite no advertising – testimonials spread via word of mouth. “The popularity of the course is due to being conveniently online and is actively facilitated in a group,” says Cary.
Participants report that after completion, their attitude to money changes completely – they start to build up savings and assets, create pension plans, and permanently shift their spending patterns and habits.
“I learnt from the course that budgeting can help me make better financial decisions, prepare for emergencies, get out of debt, and stay focused on long-term financial goals,” said Salima Minsarya from Uganda. “I learnt how to classify and break down my expenditures into needs and wants.”
Fariza Khudododkhonova, from Tajikistan, considers the course a financial roadmap that outlines each vital step to creating and controlling a budget. “One of the important steps helping me to control my family budget is keeping track of my expenses,” she said. “In the beginning, it wasn’t easy, sometimes I did it on my phone notes where I wrote how much I spent, then in a notebook, and now it is becoming a habit, and I’m really enjoying it,” said Fariza.
She mentioned the course helped her to think longer-term, far into the future.
“In our context, we don’t think much about writing a will,” added Fariza. “Most of the time people consider it when they are old or before death, but I am already thinking about it and have already started preparing it.”
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Sumaino Shakarbekova recently graduated with a BA in Communications & Media from the University of Central Asia, and delivered the valedictory address at the Naryn campus Convocation ceremony. She currently serves as an Intern with The Ismaili.
