Financial Literacy

In terms of the financial system and economy, financial literacy will stimulate economic activities; lead to better regulation of the industry and healthy competition in financial services and products offered.

Promoting Financial Literacy

While some economic and human development disparities exist between African countries, most populations have relatively low financial literacy levels. According to S&P’s Global Financial Literacy Survey, African countries score the worst in financial literacy globally.

Topics such as interest rates, loan requirements, saving, budgeting, and loan risks are among the many areas in which most Africans lack knowledge. This brings the realisation that the majority of the population in Africa faces difficulty in financial mobility.

Most of those living in developing nations within Africa do not necessarily have the capacity and financial capability to effectively plan their financial future or invest in financial knowledge due to the general economic instability and financial issues. The reality is that Africa is in dire need of financial literacy improvement.

Mobile and Technology

Even though financial literacy levels in Africa have a lot of room for improvement, technology has grown tremendously on the continent. Africa has embraced a digital transformation with technology growth in the continent. In this light, technology can prove useful in promoting financial literacy.Mobile phone penetration and access in Africa continue to rise. Projections indicate that unique mobile subscriptions will rise to 614 million in 2025. Among these users, 475 million will have mobile internet access.

Thus, financial literacy in Africa can progressively expand due to the surge in mobile phone usage. Internet access creates an environment of knowledge accessibility. This is important since it allows people of all backgrounds to seek information and relevant education.

Most of Africa’s internet user growth derives from affordable smartphones and the internet. This growth presents an opportunity to use such platforms to raise financial literacy awareness and comprehension. Operators are continuously communicating with customers as mobile money markets and digital financial services grow in popularity.

Mobile money carriers might use these platforms to offer message-based financial literacy classes to supplement their current services and products. Aside from offering courses on their platforms, mobile money providers could implement a goal-oriented savings program.