Participants at the Asia Regional TOT in Indonesia practice using an ATM.

What is Financial Education?

Financial education empowers the poor to make wise financial decisions. It teaches people how to save more, spend less, borrow prudently, and manage their debt with discipline. It can help more experienced learners understand an array of financial services from money transfers to insurance. 

Financial education (sometimes called financial literacy) is not a new idea. In wealthy countries, it is an integral part of civic education. But in the developing world where poor families need basic money management skills to stay ahead of the next crisis, such training is scarce.

In the context of microenterprise development, financial education is the next training frontier. Overlooked for decades, it is the precursor to the more common business skills training. It is broader in scope and more relevant to a wider range of learners—indeed anyone who makes decisions about money and finances.

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