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Financial Literacy of MF clients-Capacity Building Needs

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Financial Literacy of MF clients-Capacity Building Needs

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    1. Financial Literacy of MF clients-Capacity Building Needs P C Chaudhri, DGM/FM Bankers Institute of Rural Development Lucknow

    2. Skilled & Efficient Manpower Present scenario is that of shortage Our track record Future problem may be of too many

    3. Greater challenge Ensuring better efficiency of credit Both , disbursal and its use The answer – Client Literacy Most Ideal Situation – Self assessment of credit absorption capacity

    4. Technology Infusion The pace of offerings Efficient on supply side, strange to other side. Comfortable or uncomfortable Introduction without familiarization

    5. It has to be a techno – financial literacy

    6. Financial literacy Are we with him post disbursement? Who she/he is looking towards for financial mgt? Spouse? People struggling for two meals expected to handle hundreds of rupees (meager to us)

    7. Attrition -Another dimension for MFIs Financial grounds/ Locational grounds Leaves credit staggering effect albeit momentarily Solution rests in financial literacy of clients Systems in place with FL of clients will negate temporary paralysis

    8. Who will foot the bill? Look for grants/ supports or load it to interest Whether existing rates are low to accommodate new burden? Immediate options not available So should we go ahead looking at the requirements ?

    9. The Rationale Increased efficiency of credit flow Increased efficiency of credit use Increased recovery, reduced delinquency Product innovation on feedback from financially literate client- Increased business

    10. Rationale & Possibility Will it not offer a possibility of actually reducing interest rates?

    11. Yet another possibility Who will impart training –Credit disursing personnel or Separate dedicated arm of MFI? Is there a possibility of Handholding among MFIs at least at State level –linguistic grounds Fair chance of super specialization in Client Financial Literacy Much better chance of getting financial support from larger stake holders

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