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Financial literacy is considered an important element in the promotion of and ultimately financial stability in the lives of consumers. Both developed and developing countries, therefore, are focusing on programs towards financial literacy and education. Further, the process of educating may invariably involve addressing deeply entrenched behavioural and psychological patterns that could be major barriers in reaching out to the consumers of financial services.

In countries with a diverse social and economic profile like Nigeria, financial literacy is particularly relevant for poor households as they are vulnerable to persistent financial pressures.

With no established banking relationships, the un-banked poor are pushed towards expensive alternatives. The challenges of household cash management under difficult circumstances with few resources to rely on, could be accentuated by the lack of skill or knowledge to make well informed financial decisions. Financial literacy can help them prepare ahead of time for life cycle needs and deal with unexpected emergencies without assuming unnecessary debt.

“Financial literacy goes beyond the provision of financial information and advice. The focus of any discussion on financial literacy is primarily on the individual, who usually has limited resources and skills to appreciate the complexities of financial dealings with financial intermediaries on a day to day basis”.

 

Building financial capacity in Nigeria represents a big step in helping consumers to acquire the skills and knowledge to be capable, confident, and self-reliant when making financial decisions.