Financial Literacy – Need of the Hour?

by | Jun 13, 2018

During a recent Project Review Meeting, one of my colleagues, Mahesh shared with us the profits earned by various SHGs (Self-help groups) who had grown vegetables as an alternative source of income in the agricultural off-season.

“Each family has earned a sum of thirty six thousand rupees,” Mahesh exclaimed.

It was good money and we all cheered on that news. As someone who is into numbers, I immediately broke down that amount further, estimating that over the six months of agricultural off-season, 6000 rupees per month was a good income. On sharing the calculations with center heads and field animators present in the meeting, Manjula Tai, another staff member present there, remarked that the amount was even greater than their own salaries.

WhatsApp Image 2018-04-27 at 1.23.28 PM

Project Review Meeting with Team at Mangaon, Raigad

Her comment surprised everyone and I was stunned with the information – poor tribal people earning more than our social workers. Then, why do they still continue to struggle with poverty. For the rest of the meeting, I was silent thinking what could be the reason. Various thoughts came to my mind and I realized that majority of the tribal workers who work as daily wage labor earn anywhere between INR 250 to 300 for a day’s work. This would also roughly add up to a monthly income of 6000 rupees per month (considering a six-day working week). What could it be then, if not ‘lack of financial literacy’, that’s keeping them where they are. Let’s break it down:

Spending habits

Almost all of my earliest interactions with the center heads were about various social issues plaguing the Katkari tribe in the region and the common cause cropped up to be their spending habits. Katkaris tend to spend unreservedly in festivals like Ganpati and Shimga (Holi) as well as during wedding celebrations. There are instances every year of them taking loans from private lenders in order to spend the money on festivities and celebrations. Not even five percent of that money is spent on education or healthcare, since they don’t see it as a priority. On the contrary, and quite shockingly, a considerable amount of loan money is spent on alcohol or ‘Jatra’ (travelling fairs) and gambling.

The Concept of Money

In my observation, I have found that unlike our deeply entrenched understanding of money as the source for all resources, it’s not the same for Katkaris. Rather, it is just means for them to procure things that ‘Mother Nature’ cannot provide. They have traditionally lived in forests, especially the older lot, and believe that ‘Mother Nature’ will continue to take care of them. Of course, this is in contrast with the overall capitalist society rest of us live in, where we have no demo-graphical exceptions and thus, it leads to their marginalization. A chief example would be the failure of Katkaris to take up regular jobs of monthly pay cycles as they expect to be paid at the end of each day.

Lack of materialistic aspirations

In a way, Katkaris are how they are, because they don’t aspire for more material. “If they have spare money, they’ll not go to work that day”, one of our center heads had told in a discussion. In a developing and diverse country like ours, decision making becomes a long and laborious process if one has to carefully weigh down and take into account all factors. But there’s no denying the fact that some people face the brunt of hasty one-size-fits-all decisions, and ironically, sometimes they happen to be the ones who probably need to benefit the most from those decisions. Nobody ever took a vote of the tribal people asking if they were ready to switch from their collectivist community living and culture to a capitalist society, or move from their jungles to urban areas. It’s simply not what they aspire to be.

Savings through SHGs

Efforts have been made to empower the communities through financial literacy programs, specially in women SHGs, with an increased focus on initiating income generating livelihoods. However, what I found was that many of the SHGs were either dormant or terminated, generally within a year. The trend is to withdraw all the savings specially during Ganpati when all the money is ultimately spent. I was appalled to know that many SHGs had a monthly contribution of fifty rupees only. Upon stressing on the need for increased contribution, I was met with great reluctance and disinclination from SHG members (some of who laughed on the suggestion of increasing the contribution to 300-500 rupees per month). I was told that the Katkaris want to keep their money with themselves and didn’t trust any financial instrument. There was distrust between the SHG members themselves, wherein they’d balk at the idea of collective savings.

Consumed in these thoughts, I didn’t realize that our review meeting had come to its end. When the opportunity to pass final comments presented itself, I, who had been silent all the while, shared all my views noted above, and ended with emphasizing the need to increase monthly contributions across all SHGs with no scope for default. It was then time for others to ruminated upon my suggestion until Mahesh spoke up,

“This is a welcome suggestion. However, let me share with you something. We, the social workers here, have our own SHG. The monthly contribution for us is rupees 100 per month. But, do you know that even we default in our contributions.” Having said that, he broke into laughter, along with the others. I was schooled once again on the complexity and determination needed for behavior change.

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3 Comments

  1. saumyadebdasgupta

    Really interesting read Prateek! I know we run like Nifflers after gold to save money but of late I’ve had the feeling that communities like the Kathkaris who have not had the habit of saving, like ever, must be habituated to a lifestyle sans saving. So in essence, trying to change this habit could upend other lifestyle choices linked with it, couldn’t it? The reason I ask this is that I’ve been pondering how far, we (as organizations) truly understand the consequences of the behavioral change that we are trying to bring.

    Reply
  2. personalfinancegirl21

    Thanks for highlighting the importance of financial literacy. Financial literacy is extremely important for women.

    Till date earn less than men, tend to work for fewer years due to marriage and child-bearing, and outlive men by atleast six years.This naturally means that women are ill-prepared to meet their long-term financial goals particularly retirement.

    Reply
  3. personalfinancegirl21

    Thanks for highlighting the importance of financial literacy. Financial literacy is extremely important for women.

    Till date earn less than men, tend to work for fewer years due to marriage and child-bearing, and outlive men by atleast six years.This naturally means that women are ill-prepared to meet their long-term financial goals particularly retirement.

    Reply

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