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Money matters: How digital tools are transforming financial literacy?

Only 27% of India’s 1.4 billion population is financially literate. Wondering how to handle money? Find out here.

financial education tools

Imagine traversing a crowded metropolis without a guide or attempting to bake a dessert without instructions. It would be quite daunting, wouldn’t it? That’s the scenario one faces when managing finances without financial literacy. But fear not- we’re not leaving you directionless or without ingredients. 

In this technological era, many financial education tools and digital finance resources are readily available, poised to reshape your comprehension and management of finances. So, fasten your seatbelts as we begin this thrilling expedition to discover how these digital aids transform financial literacy. Let’s get started!

The current state of financial literacy

Only 27% of India’s more than 1.4 billion people are financially literate. The implications of this shocking statistic are far-reaching. It could be brought on by disparities between states, a lack of education, and general ignorance.

A vicious cycle of debt and insecurity can ensue when people aren’t financially literate and make bad decisions with their money.

Financial literacy requires more than basic money management skills. The objective is to grant more authority to individuals and corporations. The ability to handle one’s own money well is proportional to one’s degree of financial literacy. They can put money aside for emergencies, invest in opportunities, and plan. Because of this, the economy could grow, and people’s living conditions could improve.

But the inverse is also true. When people don’t know how to handle their money, it can lead to poor financial judgments and even economic inequality. For example, falling victim to loan sharks is common among those lacking financial literacy and mired in an endless cycle of uncontrollable debt.

The country’s low level of financial literacy might also slow its economic growth. Financial literacy helps people better manage their money, boosting the economy.

Therefore, several digital resources for financial empowerment are available in India to improve this financial literacy rate. It’s vital for the growth and prosperity of the nation’s economy.

Also read: Path to financial freedom: Your financial literacy PDF guide

The rise of digital tools for financial literacy

Many people’s lives have changed because digital financial inclusion has grown. But it’s important to remember that gaps still exist in terms of gender and other factors. These differences are more than just statistics; they reflect the realities of actual people who are having trouble gaining access to and making use of digital financial resources.

There is a diversity of causes that contribute to the gender gap in access to digital financial services. It could be due to a combination of issues, such as inadequate financial education and digital literacy, as well as high prices, gender biases, and societal norms.  

For instance, women may face societal pressures or biases discouraging them from engaging in financial services. Additionally, the cost of digital devices or services can be prohibitive for many, creating a significant barrier to access.

These problems are being addressed by fintech learning solutions and personal finance apps. They are not only making financial education more accessible but also tailoring their services to meet the unique needs and circumstances of different user groups. For instance, digital budgeting tools now offer features designed to help women manage their finances, acknowledging and addressing the gender gap in financial literacy.

Another area where digital tools significantly improve the quality of life is investment education software. By providing accessible and user-friendly platforms for learning about investing, these tools are helping to demystify the world of finance and empower individuals to take control of their financial future.

Also read: Unlocking prosperity: The transformative power of financial literacy

Successful digital financial literacy initiatives

Let’s look at some successful initiatives that have utilised digital tools to enhance financial literacy.

Pradhan Mantri Jan Dhan Yojana (PMJDY): As part of its financial inclusion programme, PMJDY ensures that all households can access basic banking services by providing every household with at least one account. It encourages using digital finance resources and tools for financial education to guarantee financial literacy, insurance, pension, and credit access.

National Strategy for Financial Education (NSFE): Intending to increase financial literacy and national independence, the Reserve Bank of India established NSFE. It employs a multi-stakeholder approach to improve financial literacy by utilising online financial literacy platforms.

Financial literacy program by NIIT Foundation: Better financial management is one of the many benefits that this programme offers. It also demonstrates the power of fintech learning solutions by providing individuals with essential life skills to help them grow professionally and personally.

Vittiya Saksharta Abhiyan (VISAKA): The Ministry of Human Resources VISAKA programme aims to eliminate the need for students to carry physical currency at universities and colleges. Its financial literacy workshops demonstrate the value of online financial education in encouraging the acquisition of digital money management skills.

PayU and CSC academy initiative: A joint initiative by PayU India and CSC academy aims to increase digital and financial literacy among women, SC (scheduled caste), ST (scheduled tribes), and BPL (below poverty line) communities, as well as other weak and disadvantaged groups in society. Among other public services, mobile vans stationed in and around the districts of Bengaluru, Delhi/Gurugram, and Mumbai instruct people about money and digital literacy.

Also read: Deciphering the numbers: Insights into the financial literacy rate in India

The future of digital financial literacy

There may be many new developments in digital financial literacy, which bodes well for the field. When spreading knowledge about personal finance in the digital age, the public and private sectors must work together.

In the realm of digital financial literacy, NGOs play a significant role. They strive to improve financial literacy through outreach efforts, education programmes, and behaviour change communication strategies. 

Additionally, they are working with the private sector, educating the public about money matters, ensuring women have access to cell phones, and advocating for the needs of those receiving financial services.

Major policy shifts in the government have been made towards increasing people’s digital financial literacy. Programs like the Reserve Bank of India’s National Strategy for Financial Education (NSFE) aim to create a more financially literate and self-reliant India. Possible solutions to the problem of financial exclusion include:

  • Flexible regulations for FinTech operations.
  • More media coverage of the issue.
  • Adding lessons on personal finance to academic educational programmes.

When it comes to digital inclusion, the private sector is at the forefront. The private sector is working to improve people’s access to and affordability of broadband, devices, and digital literacy through programmes. Slowly but surely, fintech companies are making their mark, and that’s exactly what’s needed to expand access to financial services for more people.

More money management apps and e-learning platforms for financial literacy will likely emerge soon. These tools will greatly aid digital financial skill development. Additionally, we can anticipate an increase in virtual financial workshops offering a hands-on learning environment for participants to understand financial ideas and tactics better.

Technology in financial education will become more widely used. People need to learn how to manage their money, especially when it comes to online banking because the financial sector is changing rapidly due to digitalisation. Digital literacy for finance will be essential for success in the future.

We can also anticipate more online financial courses. These courses offer extensive curricula that begin with the fundamentals of investing and progress to more complex financial planning topics.

Bottomline

Digital tools are reshaping the landscape of financial literacy. In doing so, they are removing obstacles, increasing access to financial education, and giving people agency over their own financial destinies. Joining this digital financial literacy movement couldn’t be more thrilling. 

Stay curious, keep learning, and embrace the digital revolution in financial education. Making your money work for you is more important than simply knowing how to handle money.

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StockGro Team

StockGro is India’s first and largest ‘Social Investment’ platform aimed at helping you master the art of “Trading & Investment”. Trade, Invest and get rewarded to Learn everything about ‘Investments’ the fun-filled way.

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