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Measuring Numeracy for Financial Inclusion
Abstract and Figures
This paper reviews a pilot study of financial numeracy capabilities in two nationally randomized surveys conducted in 2017 as part of Wave 5 of the multi-year Financial Inclusion Insights program by InterMedia. Financial inclusion is widely viewed as a critical tool in the effort to end poverty. But – in spite of high hopes for digital financial services - most measures of progress towards financial inclusion do little or nothing to assess the capabilities of users and potential users.
The ‘financial numeracy indicator’ developed by My Oral Village and tested in the 2017 wave of the FII begins to address this omission by identifying an important capability gap that can readily be field-tested and is within the ability of financial practitioners to correct. Three measures were tested here:
1. ability to read a single-digit number,
2. ability to read a ‘long’ number equal to between US 99.99 in the national currency, and
3. ability to make a mental calculation with a single digit number and an intermediate-length number.
Key findings from the field evidence collected during this study include the following:
• Both Cote d’Ivoire and Myanmar have very large populations without the fluency in long, written numbers required to perform an independent mobile money transaction.
• In attempting to read a long number, millions of smartphone owners made errors, including order-of-magnitude errors.
• Financial numeracy is different from school numeracy and is not improving as quickly among youth.
• Men, phone owners and those with mobile money accounts are substantially more financially numerate than women and non-owners of phones/mobile money accounts.
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... While 90 percent of respondents were classified as literate, only 64 percent could read a six-digit number worth USD 78 in kyat (the national currency). 6 While school enrollment has increased massively around the world in recent decades, it is too common for children to complete primary school without being able to read "long" numbers. 7 Optimists notwithstanding, the motivation to learn to read and write, and to keep these skills throughout adult life, depends on the availability of formal sector employment. ...
Achieving climate justice requires changes in long-evolved modern practices and institutions that systematically discount human predation on nature and on poor people. A central pillar of these outdated practices is cognitive exclusion. Nearly 1 billion adults, of whom two-thirds are women, can't read or write in any language. In the modern world this amounts to a life sentence to extreme poverty. Yet, distaste for text is also a logical adaptation in oral communities, where livelihoods depend on nature, not formal economic or financial systems. Oral communities dominate the rural areas of Asia, Africa, and much of the Americas, and inhabit much of Earth's land. ey are critical to effective stew-ardship of nature and offer a unique perspective, tied intimately to the natural world, that our educated and technocratic elite can't replace. Financial inclusion, along with its digital offshoots, has been a major project of the past five decades, with the avowed aim of ending global poverty. But its impact has been limited by a focus on moving money and delivering credit and payments. Shifting the emphasis towards the delivery of information , savings, and financial ownership can empower oral communities and individual agents within them, while accelerating and enabling meaningful dialogue between the modern and oral worlds on strategies for sustainable resource stewardship and climate adaptation.
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