‘If You Fall, Stand Up Again’: The Moral Nature of Financial Literacy in the Global South

Abstract

Over the past decade a range of development actors have begun to implement financial literacy training in low‐income countries. These programmes have become a key pillar of financial inclusion projects targeting the rural poor but, to date, they have received little scholarly attention. This article draws on ethnographic observation of two financial literacy programmes implemented by microfinance institutions in Cambodia to examine the current practices of financial education in the global South. The findings highlight that while financial literacy training purports to be a technical, skill‐building intervention aimed at enabling knowledge, its practices work primarily to impress upon borrowers moral lessons associated with creditworthiness, while also stressing individual responsibility for debt stress. In this way, it furthers the goals of financial providers, but fails to address the complex and real problems of debt stress. The authors suggest that financial literacy, at least where it is enacted by microfinance providers, is unlikely to moderate the problems of over‐indebtedness faced by rural borrowers.

Financial vulnerability and financial literacy in Paraguay: the need of a transversal approach of public policy

“…This broader concept is often named financial capabilities. Practitioners and academics working in the area have recognized the importance of financial attitudes and behaviors that go beyond basic financial knowledge since they are key elements of financial literacy and influence financial wellbeing and vulnerability (Atkinson and Messy, 2012;Lundberg and Mulaj, 2014;Bylander, 2021). In our study, we adhere to it and assume the financial capabilities approach.…”

The Underside of Microfinance: Performance Indicators and Informal Debt in Cambodia

“…For instance, one family told us that their aging mother had sold land before she died so that she would not have a debt hanging over her in the afterlife, which would cause her to be reborn at a lower status. 17 While such feelings of responsibility might be ascribed to a culturally specific morality of debt, it is important to note that the microfinance industry in Cambodia has also made a concerted effort to enforce repayment discipline since the 1990s (Bylander and Res, 2021). At that time, according to an MFI CEO who has worked in the industry for more than 20 years, borrowers frequently defaulted on their loans because they considered microfinance to be a form of charity.…”