Ujjivan Financial Literacy Program expands
There were several underlying reasons for the crisis in the microfinance sector last year; however, over-borrowing by customers and over-lending by MFIs were at the base of the problem. This led to defaults on loans and some instances of coercive collection practices by some MFI’s.
To resolve this problem of over indebtedness of customers and over extension of credit by MFI’s, Ujjivan Financial Services has rolled out a comprehensive financial literacy program on debt management for it’s clients called Diksha.
The first part of the program is a 30-minute dramatized film called Sankalp – The Resolution which shows how two MFI customers fall into the trap of excessive borrowing & ghost lending, and have to face the consequent dangers.
This film has been made to create awareness of the pitfalls of over borrowing and is available in 10 Indian languages. The film is screened at customer centre meetings, customer functions and even on local cable TV. Ujjivan has made the film available for free and any MFI is free to use it for it’s financial literacy.
Trailer of Sankalp – Ujjivan’s film on Financial Literacy
The second part involves a follow-up training program which will be conducted on voluntary basis for customers. This is a customer training program developed by Parinaam Foundation, based on their needs and consissts of five modules.
The Key areas covered through five training modules, include:
- Importance of understanding & managing the family’s cash flows.
- Basic numeric skills.
- Budgeting & planning for expenses.
- The importance of saving, ways to save and where to save.
- Pro & cons of different types of loans.
- Dangers of ghost lending and excessive borrowing.
- Credit bureau, its functions, and its impact on the customer.
The financial literacy program is being executed in two stages and is supported by Unitus and Lok Capital.