How Do Financial Literacy Classes for Adults Help Fight Poverty?

Financial literacy classes for adults are life changing. Imagine if, as you were signing your mortgage papers, you didn’t understand one word of the paperwork in front of you. Knowing you were unable to read or understand numbers, someone then made your interest rate 50 percent per year. You would never know until the first time you couldn’t make a payment. You would immediately default on the loan and become indebted to the lender for a very long time, impacting your financial health for years.

This is the type of situation those without literacy and numeracy might find themselves in when others prey on the most vulnerable. South Asia has the lowest percentage of literacy in the world, with only about 25 percent of population able to read and write or do basic math.¹ That means 75 percent of the booming population can’t read and critique official paperwork or secure a fair and competitive loan to start a business. Without these skills, they are trapped in their poverty, and so are their children.

Women are the most vulnerable, as they often fight cultural and historical stigmas that prevent them from getting an education. As one report stated,

“Women are less financially literate than men, the young and the old are less financially literate than the middle-aged, and more educated people are more financially knowledgeable.”²

The more global the economy becomes, the more it hurts everyone for large percentages of the population to be without these basic skills, which the United Nations calls a human right. According to Article 26 of the UN’s Universal Declaration of Human Rights,

“Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms.”³

But when individuals don’t enjoy this right, it not only impacts them personally but the local, and even global, economy. It’s estimated illiteracy costs the world $1.19 trillion.⁴

When a person is able to read, write and do math, they can secure a better-paying job than manual jobs such as field labor or brick making. Reading allows a person to grow in their skills exponentially, and having mathematic abilities is a protection against schemes and frauds. There are many women who have no idea if what they paid at the market for their food was a fair price or not. Just knowing what to spend and not spend on food can make a significant difference for the most vulnerable.