Bridging the Gap: The Business Case for Financial Capability

This paper is an attempt to begin to survey the evidence base on the scope of the financial capability issue, the different financial education models that are being tried and the economics of various leading and emerging approaches. Specifically, it focuses on the financial education programs being delivered by MFIs and other financial institutions—including commercial banks, mobile banking operators and others—that are targeted at low-income segments in emerging markets. Our analysis mainly focuses on the delivery model, cost structure and cost recovery model of these programs, and largely stays away from commenting on financial education content, curricula and pedagogy choices. The models selected for analysis are those that focus mainly on the individual or the household level; the report only peripherally covers models targeted at SME or business customers. Finally, because this paper is primarily concerned with product-linked financial education programs delivered by or on behalf of financial institutions and their partners, it does not focus on the financial education models offered independent of financial services—for instance, school-based financial literacy training offered by the public sector— although this too is an area that requires further rigorous research.