The concepts of financial literacy and financial education have received increased attention in many countries over the past few years. It has been recognized that a lack of financial literacy can result in poor financial choices that can be harmful to individuals and communities.

Despite multiple financial literacy initiatives, Pakistanis remain by and large underserved by programs offering financial education under government or corporate citizenship. This is particularly the case in low income and per-urban/rural communities. There are some financial education programs funded, developed and implemented by the private sector. However, many of them have very limited activities or none at all in the domain of the unbanked or the ‘missing middle’. Programs are also mostly supply driven, and impact assessment is almost non-existent.  A society’s level of financial literacy manifests itself on an individual or household level, impacts on the functioning of financial institutions, and negates the smooth functioning of markets.

On an individual basis, insufficient financial literacy can result in poor decisions, which affect their economic well being. People with low literacy levels are more susceptible to over-indebtedness, insufficient savings and are more vulnerable to over-zealous retailers or fraudulent schemes. An informed borrower is simply less vulnerable to fraud and abuse. The lack of financial literacy of potential or current clients of financial institutions may result in the selection of inappropriate products, which could negatively affect the client and the institution (non-repayment of loans; etc). Informed clients translate into reduced risk for financial institutions and also provide an opportunity for greater penetration of financial services.

On a sector or market level, proper functioning depends on a good flow of information. Informed consumers play a developmental and monitoring role in the market and help guide good practice while weeding out bad and harmful providers and practices. Informed clients are also empowered to negotiate better deals with the service providers and to put pressure on financial institutions for appropriately priced and transparent services. State Bank of Pakistan is also keen to introduce the ‘truth in lending act’ within the banks operating in low-income or underserved markets.

Tameer Foundation is currently working towards supporting activities being developed directly by the Foundation, in the localities where microfinance banks operate. Currently, it has teamed up with Tameer Bank, the fastest growing private sector microfinance bank, although from time to time it may consider partnerships with organisations like schools, community centers, other MFBs and groups where these are consistent with Foundation objectives and mission.

At this time, the Foundation is developing its own education programs and community awareness programs and welcomes the opportunity to receive a community education grant via Citigroup Foundation to enhance its mission.