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Financial Education: Key Component to Responsible Pricing

Published on July 13, 2011

By Jessica Massie

Financial education, financial literacy, and financial capabilities are hot topics in development today. They have the attention of donors and of governments all over Africa – and all over the world. Financial education is also a key activity in MFTransparency’s enabling APR & EIR Program.

The financial education component of the enabling APR & EIR Program will be piloted in two countries: Rwanda and Malawi. In Rwanda, we are relying on support from the Association of Microfinance Institutions of Rwanda (AMIR) while our partner in Malawi is the Malawi Microfinance Network (MAMN). Both networks are strong advocates of pricing transparency and are proponents of financial education programs. With the support of these networks, we are conducting a needs assessment in June and July of this year.

The development of the financial education component of the enabling APR & EIR Program brings to light several opportunities, as well as a number of challenges. As we work together with AMIR and MAMN, we will be documenting each success and lesson learned. Hopefully our experience will produce a well-contextualized and targeted program, as well as contribute to the wider discussion on financial education, literacy and capabilities. Furthermore, our program will focus on behavior change, rather than just awareness-raising.


In MFTransparency’s nascent financial education program, the support of the donor (the MasterCard Foundation) and active involvement of local partners have been strong from the start. These important factors provide us with a significant boost in the design and development of our program, which will be available in a general form by the end of this year for adaptation and use in other countries.

While it is too early to predict exactly what the financial education program will look like, we can say with certainty that no matter what, our program will allow us to test a number of innovative concepts and apply lessons from other fields in terms of behavior change.


While there is some evidence that financial education programs have the potential to be effective when developed using sound research, and when content and delivery are designed using lessons learned from past projects, the jury is still out on the effectiveness of programs in terms of changing behavior. With regard to transparent pricing, framing our objectives in terms of behavior change means that we should not just aim to help people define interest rates and be able to calculate them, but to use these abilities to make informed decisions about credit.

Another challenge is avoiding the “forever pilot phase” (as the Swedish International Development Agency (SIDA) so succinctly put it) or a one-off program or campaign. Our greatest challenge is to come up with a cost-effective, useful program that regulators, financial institutions, or NGOs will take up and use. In the absence of ongoing donor funding or a clear social mission (like that of Habitat for Humanity in Uganda), even good financial education programs do not survive infancy. With the support of its excellent partners, MFTransparency’s program is well-positioned to be the exception to this trend.

One of my favorite pod-casters, Russ Roberts, has stated that “innovation is a largely trial-and-error process.” Luckily, MFTransparency, while on the cutting edge with this program, has good company in this journey. With a clear idea of our advantages and limitations, we look forward to starting our needs assessment this month. We will be sure to keep our wider group of stakeholders updated using the blog and website as we gather information and begin to design and pilot our financial education program!

For more information on MicroFinance Transparency’s financial education program, contact Jessica Massie at [email protected]

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