Financial Literacy: A Journey from Education to Entrepreneurship
In an era marked by economic volatility, rising living costs, and increasingly complex financial products, financial literacy is no longer a luxury—it's a necessity. Understanding how to budget, save, invest, and manage debt is not just essential for individual well-being; it is also foundational to the rise of entrepreneurship in a country.
Why Financial Literacy Matters
Hon'ble Prime Minister has envisaged a vision of Viksit Bharat by 2047; he does not see Indians as job seekers but also as job creators. These Entrepreneurs will not only drive the economic engine of the country but also bring social change at large.
India has largely remained a capital-starved country, but to develop the economies of scale, capex has been of paramount importance. To attract easy and cheap foreign capital, we need to be more agile and embrace frugality.
Financial literacy at an early age can play a pivotal role in shaping up Viksit Bharat we dream about. It's an ability to understand and apply various financial skills, including personal financial management, budgeting, investing, credit and efficient use of banking tools for business. A financially literate population is better equipped to make informed decisions and withstand economic shocks.
According to the OECD, lack of financial literacy can lead to over-indebtedness, under saving for retirement, and increased vulnerability of businesses. These issues, when widespread, can undermine economic stability and strain public welfare systems.
Despite increased access to financial services, many individuals and businesses in India struggle with basic money management. People are hardly aware of the tools and government schemes they can leverage. The MSME segment has largely been confined to managing on their own, not because enough opportunities are not being provided by the government, but they are not aware of how to leverage them.
In countries like India, MSMEs are dependent mostly on bank credit, and that too sometimes at a very high cost. SME IPO's have provided a huge opportunity to unlock the capital potential, but that has also come with a mixed response.
Education and Policy: Need of the Hour
Promoting financial literacy requires a multi-pronged approach:
1. Integrating financial education into school curricula ensures that young people gain financial skills before entering the workforce.
2. Starting early in school can do the magic. Financial Literacy is not only understanding of finance, it's a change of lifestyle towards money matters. If we start early, then only this can become a part of our life and way of living.
3. Demographic dividend can be leveraged only with a literate and aware population; otherwise excess population can become a curse to the society. Today, in urban centres, kids are prone to shopping, buying out of wants, not needs, impulsive buying and excess use of credit infrastructure.
4. Finfluencer is not required; a Fin-Mentor can be a game changer. Regulators should not discourage people who are spreading awareness about financial literacy or finance by and large, but should come up with a framework where they should feel encouraged to become a Fin-Mentor to MSMEs and educational institutions.
Young India should not become a perplexed India
More than 65% of the population is under 35 years of age. These are the citizens who would probably become the next job creators, but without financial literacy, it would not be possible at all. If we have to make our next generation efficient and globally acceptable, we need to make them future-ready, financially.
Improving financial literacy isn't just good for individuals—it's essential for economic resilience. In a world of rising costs, shifting job markets, and evolving financial products, empowering people with the knowledge to manage money wisely should be treated as a national priority.
The article is written by Abhishek Luthra, Director- Portfolios & Products, Kaima Asset Private,
Note to the Reader: This article is part of Mint's promotional consumer connect initiative and is independently created by the brand. Mint assumes no editorial responsibility for the content.
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