Financial services are analogous to safe water, basic healthcare and primary education ~ they are essential to enable people to participate in the benefits of a modern, market-based economy. Ideal financial societies are those which provide safe and convenient ways that enable people to navigate their daily financial lives. The poor need to set aside money in times of plenty and draw it in lean times. In addition, they should be able to borrow, make and receive payments, and manage risk.

Without a safe place to save money, it’s difficult to cope with the unexpected or to plan for the future. Without access to affordable credit, it is difficult to acquire an asset or set up a business. Without insurance, all your security can be wiped out by one misfortune.

But for people to be able to use financial services, they need to be literate enough to understand the basics of these monetary affairs. Merely opening physical accounts as flag posts of financial identity won’t help unless they are actively used by people for managing their money. To make this possible people must be given the ability to understand and execute matters of personal finance, including basic numeracy and literacy, budgeting, investing, and risk diversification. This skill is known as financial literacy. It is a combination of financial awareness, knowledge, skills, attitude and behaviours necessary to make sound financial decisions and ultimately achieve financial well-being.