Financial Literacy and Microfinance

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REPOST FROM THE KIVA FELLOWS BLOG

By Sheethal Shobowale, KF9, Peru

Doris, one of the loan officers at Asociación Arariwa, has been working with clients in Urubamba and Cusco for 17 years.

I sat in on one of the monthly loan payment meetings of one of her communal banks, Aguas Buenas. All members paid their monthly payments on time, but two of the members asked permission beforehand not to attend. Because of their absence, Doris commented on the importance of attending the monthly meetings, saying “No vamos a lograr nada” (We won’t achieve anything this way). She even called one of the absent members on her cellphone to remind them of the importance of attending monthly meetings.

Attendance is importance especially since during each meeting, loan officers teach a short workshop on different topics such as financial literacy, business training, family well-being or health. In this meeting Doris taught a lesson on setting financial goals. Having done some financial literacy workshops for teenagers and some credit counseling for adults in my work with the Lower East Side Credit Union in New York, I was excited and honored to see Arariwa’s financial literacy training in action, especially by a loan officer as experience as Doris.

Pocket Entrepreneurs Benefit from Teenage Philanthropists | Edutopia

It’s great to see high school students involved in microfinance, and in turn learning lessons in finance, leadership and social entrepreneurship. Could this be used on a wider scale to help teach financial literacy to youth?

Pocket Entrepreneurs Benefit from Teenage Philanthropists | Edutopia

Reveca, a mother of four, struggles to support her family by selling flowers on the streets of her village in Peru. But thanks to a $325 loan from high school students in the United States, she recently expanded her small retail operation.

That’s right, high school students.

The budding bankers are trying their hand at microlending, a practice pioneered by Nobel Laureate Muhammad Yunus to help the world’s poor. Microloans allow entre­­preneurs who lack the collateral needed for traditional financing to borrow small amounts — typically a few hundred dollars — to expand their enterprise.

American teens are beginning to see microlending as an opportunity to make a big difference through small loans. Justin Blau, a senior at Las Vegas’s private Meadows School, founded the Meadows School MicroBank, one of the first microlending initiatives based at a high school.

Under his leadership, students have raised $27,000 to invest in businesses in the developing world. Blau learned of microlending two years ago while doing research for a debate competition. “I realized that $50-$100 can transform a family’s life,” he says.

Around the same time, a program got under way at a public school in the Seattle area. Bellevue High School’s Microfinance Club has now made more than 1,100 loans in the Caribbean region. Its assets exceed $125,000, says founder Scott Bennett, a senior.

The schools’ microlending programs differ somewhat, but they share a purpose: to support developing economies while giving students a powerful experience with philanthropy. “It’s real money and real people we’re lending to,” says Blau. “That’s why we’re so motivated.”

-From Pocket Entrepreneurs Benefit from Teenage Philanthropists

Shared via AddThis

WNYC – News – Many New Yorkers Live in Zip Codes Without Banks

I heard this on the radio this morning.  This sounds like the Lower East Side of Manhattan before they started the LES People’s Federal Credit Union.  Now the neighborhood has changed and there are many banks in the

WNYC – News – Many New Yorkers Live in Zip Codes Without Banks –

NEW YORK, NY July 13, 2009 —Some 280,000 New Yorkers live in zip codes without a single bank. That’s according to an investigation from city councilman Eric Gioia.

REPORTER: He says if a check cashing place is the only financial institution in a neighborhood, it’s nearly impossible for residents to make it into the middle class.

GIOIA: Without a bank, you can’t save up for college, you can’t even get a credit card, so a mortgage is completely out of the question.

REPORTER: The Queens Democrat, who is a candidate for public advocate, is calling on the city to aggressively market empty commercial space to banks. He also wants the state to allow credit unions to be part of banking development districts.

(Shared via AddThis)

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Also in the New York Post –

A Queens councilman yesterday called for a summit between banks and city officials to find a way to get financial institutions into low-income areas.

“We’re living in a two-tiered city,” Democrat Eric Gioia said at a news conference at 32nd Street and Park Avenue, where there are six banks.

In a recent study, Gioia said, his office found that the city has eight ZIP codes without a bank.

One way to bring banks to these areas is to aggressively market vacant retail spaces to banks and credit unions, the councilman said.

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I was looking to for a list of zipcodes that don’t currently have banks.  I saw Queensbridge on Councilmember Gioia’s website but couldn’t find a complete list.

Incidentally, the councilmember is on Twitter (@EricGioia).

The Lower East Side People’s Federal Credit Union is helpful to the community for its affordable financial services as well as financial literacy training.  They help low-income New Yorkers receive benefits and services they need, while keeping members away from check cashers and payday lenders.  They also operate a free tax preperation (VITA) site during the spring, helping neighbors receive the Earned Income Tax Credit if eligible.

The Extraordinaries: Will Microvolunteering Work [for financial literacy]? : NPR

The Extraordinaries: Will Microvolunteering Work?

via The Extraordinaries: Will Microvolunteering Work? : NPR.

The gist:

Got five minutes? Got a cell phone? Want to do good?  The Extraordinaries can help. It’s one of a number of newly hatched social-media enterprises that champion speedy cooperation. Here is the 30-second elevator pitch: The Extraordinaries delivers microvolunteer opportunities to mobile phones that can be done on-demand and on-the-spot.

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Would this concept work for a financial literacy mentorship program?  It does mention “giving advice to college applicants” as one of the microvolunteering possibilities.

What financial literacy questions could be answered for a mentee while waiting in line at the supermarket?

Could this make sense?

Thoughts?

More on this as I explore the concept a bit more…  Just wanted to get a thought started before my ADD-ness causes me to move on to something else before I record it.

Have a good weekend!

Expiration of mayoral control of NYC schools

This is sad because of the ridiculousness of the senate to waste our money but mostly because our children’s educations will suffer, financial and otherwise.

STATEMENT BY GEOFFREY CANADA ON EXPIRATION OF MAYORAL CONTROL LEGISLATION

NEW YORK, NY – Geoffrey Canada, Chairman of the Board of Learn NY, released the following statement regarding the expiration of the legislation instituting mayoral control of New York City’s schools:

“Today is a sad day. Without a vote by the Senate before 11:59 p.m., which appears unlikely, the New York City school system, the largest in the country, will officially be without a governance structure. The old system that failed seven years ago has been disbanded, wisely, and putting it back into place cannot happen overnight – and if we want our children to keep making progress, we should not ever go back to it.

“The Senate’s inaction has put our children and their schools in limbo. With summer school starting tomorrow, the basic services that help our kids and parents get through the day are now uncertain. Important decisions over budgets, contracts and the hiring of teachers cannot be made. The entire system is subject to massive legal disputes. There is, quite literally, no one in charge.

“What do we tell the 1.1 million children who attend New York City public schools? What do we tell their parents – tens of thousands of whom contacted their legislators to support mayoral control? What do we tell the stakeholders and leaders who came together to discuss this issue and all decided that renewing mayoral control was the best course of action?

“Our grassroots effort, on behalf of the majority of parents who support mayoral control, is far from over. Every day that goes by without action, the Senate puts our schools at risk. Learn NY and its 79 coalition organizations will continue our efforts to advocate for renewal every day until the bill is passed.

“I have spent more than 25 years working for better schools in Harlem. I am not going to give up now. We will do whatever it takes to make sure that children do not fall through the cracks and that they have the schools they deserve.”

Putting the Bad Behavior in Check

After reading this article in the New York Times Finding Financial Advice in an Age of Bad Behavior regarding some Financial Advisors from the National Association of Personal Financial Advisors being brought up on charges, here is a summary of tips from the article –

• Check the legitimacy of planners’ credentials – Credentials such as the certified financial planner (CFP) designation, certified public accountant (CPA), chartered financial analyst (CFA), all of which require passing exams.
• Know your Customer (KYC) should also apply in reverse to your financial planner.  Some bit of instinct and a lot of spending the time to get to know him or her.  Ask them to sign a fiduciary oath, promising to act in your best interests at all times.
• Do your own due diligence and research – Don’t just take your advisor’s word for it. There are many free resources to learn and perhaps your next investment comes from an idea you had.
• Be Aware and Check the details – Read your account statement carefully. If you see something, say something.  Ask for clarification if you can’t understand the jargon, strange numbers or anything else on your statements.

People need to take responsible for their future. If it’s a free lunch there’s probably something fishy about it. Lunch is actually quite expensive these days. Hopefully you’re bringing it from home and saving the cash.

NPR Technology Podcast – Managing your Finances Online

I subscribe to the NPR: Technology podcast and am a little behind in listening.  Yesterday I  just listened to an episode that focused on using online resources to manage your finances.

Link to NPR Podcast – Beyond The Kitchen Table: Sorting Finances Online
Link to Online Financial Resources – List of Financial Website from Omar Gallega on NPR

I plan to explore these resources in future posts.

Kids Count Online Curriculum

Networks Financial Institute at Indiana State University (NFI) is doing great things, creating online curriculum that elementary school teachers can easily work into their math, economics, and reading lessons.

A note from Kids Count –

Site by site, tweet by tweet, click by click…elementary educators throughout the nation are learning how they can introduce the concept of money into their classrooms. On April 16th, Networks  Financial Institute at Indiana State University launched the Kids Count™ online curriculum. This free, Web-based resource provides teachers in grades three through five with personal finance lessons that are mapped to reading, math and economics standards in all 50 states. The Kids Counts™ board game provides additional opportunities to integrate financial literacy into classroom lessons.

See what educators and parents think about this first-of-its-kind classroom resource http://www.yourupdate.tv/moneyandfinance/kids_count.htm

Then, take an online test drive of the Kids Count Online curriculum at www.nfikidscount.com.

I checked out the website today.  Some highlights –

You can search for units by

• State (NY, NJ, etc)
• Grade (3,4 or 5)
• Subject (Math, Economics, Social Studies, English, Science)

Each unit has Objectives and Applicable Standards and has Step by Step instructions on how to teach the unit with definitions, exercises, etc.   It’s easy to download the unit (free registration required) and bring the material into the classroom.

There is also a section to rate the unit.  This feature will be useful as educators begin using the curriculum and there is a critical mass rating the units.

Here’s an example, I searched for NYC, All Grades and Math.  I selected the Deposits Unit.

Objectives

• Define deposit, deposit slip, teller, and transaction.
• Determine the right amount of money to deposit.
• Fill in a deposit slip and determine deposit totals.
• Explain ways to save more money.

Applicable Standards

• NY 3.CN.1 – Recognize, understand, and make connections in their everyday experiences to mathematical ideas
• NY 3.PS.5 – Formulate problems and solutions from everyday situations
• NY 4.1.2 – explain how people’s wants exceed their limited resources and that this condition defines scarcity
• and many more…

I downloaded the material.  Here is the Deposits unit.

I am not an educator by training but have done some financial literacy workshops for students in New York City.  I am very interested to find out what teachers think of this and if they would have the opportunity to use it in their classrooms.

Kids Count™ is a complete financial literacy program developed specifically for elementary age kids. Students learn the basics of managing money from earning an income to setting spending priorities, from developing budgets to tracking financial accounts, and even the importance of giving to their communities. Each lesson in the Kids Count™ curriculum is mapped to relevant Department of Education Standards, so teachers can effectively meet and exceed learning objectives.

Cincinnati Public Schools to teach financial concepts in K-12

I have read several articles about schools mandating financial literacy curricula.  Here’s one from the Cincinnati Business Courier –

Cincinnati Public Schools Superintendent Mary Ronan introduced on Tuesday a plan to teach a financial education to CPS students from kindergarten through grade 12.

Ronan made the announcement at a news conference with Ohio Auditor Mary Taylor.

“Today’s economy has taught us how important it is graduate well-rounded students who know how to thrive amid financial challenges,” Ronan said in a news release.

The curriculum was developed by the University of Cincinnati’s Economics Center for Education & Research. The idea grew from the Accounting For Kids program, an annual workshop for fifth- and sixth-graders that teaches financial literacy concepts. Cincinnati Public Schools students also participate in the program.

In kindergarten, for example, children will participate in activities centered on the financial side of owning a pet. By third grade, each child will have a classroom “job” and spend school-based currency at a mobile incentive van. Fifth-graders will learn about microenterprises and eighth-graders will study the basics of investing.

On the high school level, UC’s Economics Center for Education & Research, with input from more than 60 volunteers from the business community, will redesign CPS’ economics courses to include personal finance lessons like budgeting and managing a checking account.

New Ohio graduation requirements mandate that high school students study personal finance, beginning with the 2009-10 academic year.

I’ll watch the progress of other schools to do the same!