03 Mar 2022

Championing Financial Education

Ever heard of a person who built a house without a foundation? In reality, there is a zero percent possibility that this can happen because every building requires a foundation. The foundation is marked as a distinctive compulsory requirement for building a structure that can withstand the toughest winds. 

In Africa’s financial industry, the constant wave of innovation among players (financial institutions, fintech & embedded finance companies) has led to the attraction of global and local investors who want to be a part of this growth. In the last few years, the continent’s fintech space has received the most funding when compared with other startup categories. A report by markets insights firm Briter Bridges indicates that Fintechs account for roughly $3 billion, or two-thirds of all the investment achieved by startups across the continent in 2021. This amount is considerably higher than the last two years, indicating that the industry holds a promising future. 

With the rise of financial products and services in the continent, it has become pertinent to expand our horizons on the individuals who are the end-users of these products and services. The significance attached with understanding these different individuals, also called target audience (s), cannot be overestimated. As noticed in many African societies, there has remained a lingering divide between rural and urban communities, which has led to massive differences in how individuals residing in these communities access financial services. It’s still today’s reality that financial institutions (banks) have physical branch concentrations in urban areas compared to rural areas. 

While it is an accepted truth that most households in rural areas are financially excluded largely because of their lack of access to financial services, the lack of financial knowledge has shown to be a significant challenge. Many individuals, especially those who reside in rural communities, lack financial literacy, which negatively impacts their financial wellness and impedes progress in other aspects of their lives. A Global Financial Literacy Survey conducted by Standard & Poor (S&P) found the rate of financial knowledge among Africans to be very low with literacy rates of 40% in Tanzania and 38% in Kenya.

When individuals lack financial education, they are unable to navigate their financial journey and make wise financial choices that will improve their lives. The truth remains that in order for African countries to achieve their financial inclusion targets, consistent efforts must be made to provide financial education to people, especially those in rural areas. 

To address this problem, Rural Inclusion CIC is improving financial inclusion in rural communities worldwide through access to financial education. The company utilises a transformative approach to achieve this. It is currently working on Ostrii, a digital platform transforming the delivery of financial and digital education in rural communities across East Africa, which will be available across six countries starting in July 2022 (Uganda, Kenya, Rwanda, Zambia, Tanzania, Malawi).  Since its launch last year, the Social Enterprise has empowered Africans with financial knowledge, providing them with tools and the right resources to manage and grow their finances. 

Financial education remains the foundation to achieve financial inclusion, and there’s no better time to educate people than today.