Financial education involves teaching the knowledge, skills and attitudes required to adopt good money management practices for earning, spending, saving, borrowing and investing. Providing financial education can be of benefit to microfinance institutions (MFIs). Institutions that provide financial education can attract more customers, since better informed clients will be more willing to use financial services if they more clearly understand them. Institutions offering education may also gain greater customer loyalty, superior feedback and market information that can be used to improve their products and services and remain competitive. All in all, financial education is dubbed a ‘win-win’ relationship for both clients and MFIs.

This Microfinance Opportunities Technical Note presents the three key elements needed for MFIs to develop an effective financial education curriculum. They are:

1. Market research -- to learn what to teach and how to teach it;
2. An institutional and human resource assessment - to understand the skills and capacities of the staff expected to deliver the training;
3. A systematic planning process -- to ensure that the information learned in the above two steps is incorporated into the final curriculum.

Market research into understanding the financial education needs of poor people, was undertaken during Microfinance Opportunities' Financial Education for the Poor Project – a collaborative 3 year exercise with Freedom from Hunger and the Citigroup Foundation. The project also involved partnerships with six MFIs in Africa, Asia, Latin America and Eastern Europe. They found that there was a consistent demand for these broad themes of financial education:

• Money Management: How to proactively manage money;
• Debt Management: How to control debt and avoid over-indebtedness;
• Managing Savings: How to save regularly and in a safe location;
• Financial Negotiations: How to strengthen clients' bargaining position vis-à-vis input suppliers, other household members, and financial institutions;
• Use of Bank Services: How banks work and impose charges; How clients can maximize bank services, interact with banks and effectively use ATMs.

These findings were incorporated into the development of their pilot financial education curriculum that has been modified and implemented in several different microfinance education projects.