Financial Education in China: Challenges and Lessons in an Embedded Model

Rural Chinese women and their financial capability are the focus of a study in rural China

> Posted by Tyler Aveni, Positive Planet Co-Country Director (China)

Through the support of Diageo’s Plan W initiative, Positive Planet’s three-year women’s empowerment project Banking on Women has provided financial education to more than 8,000 women across Huimin Dongfang Microcredit Company‘s client network in Ningxia Autonomous Region, China. The project’s curriculum, which is based in the core financial concepts of savings, risk protection, and digital finance, is intended to empower women in the household and community through increased financial decision-making power. With the project more than two-thirds completed, Positive Planet has just published a case study that explores the project team’s experience in working to build the financial capability of rural Chinese women.

As written here before, China’s rural women stand to greatly benefit by being introduced to financial concepts and related services. However, China’s government has yet to establish a national strategy for financial education that clearly looks beyond urban residents’ financial capability needs. (Current efforts mostly cover security precautions for traditional banking, anti-fraud measures, counterfeit currency awareness, and illegal investment prevention.) Serving rural residents and their unique set of circumstances and needs will require a greatly expanded financial capability-building offering. For such an expansion to work well, it will need to include programming that looks at the rural population separately. Further, implementation for rural programming should lean on the experience and opinions of diverse local groups and township government offices. Unique cultures, language dialects, and market distinctions across China’s many regions make one-size-fits-all financial educational content less effective. Central planning and support play a crucial role, but resource design must allow for calculated flexibility per the local settings.

Banking on Women is an attempt to start bridging this rural China financial capability gap. The project borrows from international financial education program methodology, while also exploring new ideas in project design and implementation that better suit China’s rural poor and Ningxia’s market circumstances. For instance, the project takes advantage of WeChat, a widely used texting and social media platform in China, by posting stories and lessons that get sent to subscribers’ phones. Voice messaging features have made the mobile application more accessible to partially illiterate rural women in China who are increasingly likely to own smartphones. The result is that a majority of rural women under the age of 50 in Ningxia (and in most other provinces) can now utilize WeChat to communicate and gain access to new sources of digital financial information for the first time.

Banking on Women is an attempt to start bridging this rural China financial capability gap.

Though the project explores new features, such as WeChat, it still fundamentally operates on the training-of-trainers (ToT) model of disseminating content. Positive Planet consultants train loan officers in key concepts as well as the skills required for training their clients. After receiving this training, loan officers are equipped with a set of simple financial capability tools, exercise instructions, and teaching cues so that they can more effectively engage their clients with content. During monthly, community-based loan repayment meetings, loan officers share the information and lessons with their clients.

Because the project aims to establish a sustainable approach to financial capability-building, loan officer-to-client trainings are designed to be compatible with regular work and are therefore kept brief, flexible, and conversational. By embedding educational content and client engagement directly into daily operations and providing many light touch points, key financial concepts can be reinforced in the long-term. Moreover, the MFI does not become over-encumbered with resource-intensive activities and programming that may not be realistically sustainable.

Of course, creating such a system remains a work in progress. The project has been an evolution of ideas and strategies, reflecting limitations and challenges of reaching remote clients through a rural organization. The case study “Banking on Women: Financial Education in Rural China” sheds light on this development process. Topics covered in the case study include the following:

  • Digital channels for dissemination
  • Client-centric design in addressing diverse needs
  • Curriculum development for rural Chinese
  • Project activities and implementation organization
  • Training methods and impact
  • Importance of local role models
  • Incentivizing loan officer training

The paper can be viewed or downloaded in its entirety on the Positive Planet China website. It is available in English and Chinese.

Since its entry into China in 2003, Positive Planet has supported China’s microfinance sector development by providing direct technical assistance to microfinance institutions. In recent years, Positive Planet has expanded its support beyond just technical advisory to MFIs, including direct assistance to MFI clients and other economically marginalized groups in areas like financial education.

Image credit: Positive Planet

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