Project Parivartan

Project Parivartan was a 15-day long pan-India financial literacy drive conducted by the Students of Commerce and Economics Department of Hansraj College to sensitize over 8000+ people from 35+ cities with the knowledge of the basic concepts of personal finance.

Objectives of Project Parivartan:

The term ‘personal finance’ refers to all areas of money management, including saving and investing. It comprises a large number of aspects like budgeting, banking, insurance, mortgage, tax planning and saving. With an increase in fintech and people’s trust towards the online method of money management, knowledge of the basic concepts of personal finance becomes a necessity.

Therefore, the objectives of conducting Project Parivartan were:

• To provide a realistic image of personal finance and its online operation among the SHGs to understand how individuals handle their money, from spending to saving, as well as their attitudes about it.
• To instill a sense of importance of education, financial education specifically in the people.
• To make people understand the importance of being financially literate and independent.
• To inculcate the importance of banks, formal sector credit and insurance in the underprivileged sections of society to save them from exploitation.
• To create awareness about the various concepts like budgeting, saving and investing to help the businesses which the SHGs are running.

Context:

Financial literacy is the ability to effectively manage a variety of financial skills, financial investments and services have recently become widespread among people of all economic backgrounds.

a. Ease in borrowingBased on an RBI study, 42.9% of the population borrowed money from informal sources and pay higher interest. A strong financial education can help small traders make informed decisions and make the best use of available resources.

b. Ease in doing business transactionsThe launch of PradhanMantri Jan DhanYojana has led to an addition of 280 million new bank accounts. These accounts have led to an ease of doing business and have also promoted cashless transactions to a great extent.

c. c. Growth of MSMEsMSMEs contribute to 29% of India’s GDP with 50% of the exports coming from this sector. Financial literacy can help small businesses grow and even bring new businesses to the market.

Hence, by reaching out to the SHGs working with the underprivileged sections of society, Project Parivartan ensured that the measures taken help in the fulfilment of the objectives and fill the underlying gap in India regarding the knowledge of personal finance.

The Practice:

It can be said that all those who possess financial literacy are literate but not all who are literate have financial literacy. This dichotomy is manifested by a survey conducted by the National Centre for Financial Education in 2019. It was found that despite India having an 80% literacy rate, only 24% of them are financially literate. Thus, though India is getting more literate, there is a dearth of basic financial literacy among that 80%. According to the 2017 S&P financial literacy survey, Indian adults ranked below the average adult worldwide, in BRICS nations and South Asian nations concerning financial literacy.

When compared with the 2019 data, it is sad to see the extremely slow growth there has been in the 2 years indicating the remoteness of the topic.

The project began with an initial survey that would assess the current scenario on the knowledge of basic financial topics such as personal finance, Budgeting and what refrains people from opening UPIs and bank accounts in general. This survey reflects the conscious level of people when it comes to their money.

Targeting low-income earners helped us understand why people are hesitant and uninterested in using online financial systems.

After the survey, we began our on-ground activities wherein under Project Parivartan 2.0, collaborated with numerous SHGs and NGOs. Under this, we introduced the members to various financial topics such as types of bank accounts, government schemes, investing avenues, and the time value of money.

The members of these organizations were intrigued to know more about such topics and showed great zeal to learn.

While conducting the sessions and survey in SHGs and NGOs many grievances and problems came to light which compelled us to think of solutions to resolve the issues. A whopping 57% of respondents still prefer to use cash and cheques as a medium of transaction and were concerned to switch to an online medium having heard of many frauds and scams. Lack of exposure to the digital world and being a victim of financial fraud refrained people from opting for the digital medium.

Evidence of Success

Under Project Parivartan we at Commerce have impacted 8000+ people in almost 15+ cities with the aim to spread financial literacy on basic financial topics.
A preliminary survey was conducted and its analysis is mentioned below

• 43% of the respondents maintained a monthly budget but 20% do so occasionally. The remaining 37% never maintained a budget at all.
• About 93% had a bank account showing the success of PradhanMantri Jan DhanYojana but still, a few were hesitant to open an account.
• 47.91% of the respondents did not avail of online banking services while 52.09% did.
• Around 29% of the respondents were aware of some government schemes.
• A post-project survey was also conducted wherein there was a sharp change and rise in the percentage of people’s attitudes. It was observed that
• The number of people who started mostly budgeting due to understanding its importance rose to a whopping 82%.
• There was more trust instilled towards banking and opening family accounts for future savings as well.
• After the project, a total of 85.3% of the people had a UPI account which they were utilizing for their daily activities
• Around 71.2% of the people were now aware of various government schemes they can avail of and were aware of various investment avenues such as PPF.

Problems Encountered:

The problems faced under Project Parivartan were related to the ignorance and mistrust of people towards the supposedly modern methods of maintaining and using their money. A few of these problems which were experienced while attempting to sensitize the underprivileged sections of the society were as follows:

Low Earnings:

The underprivileged sections of society felt that they do not earn enough to practically utilize the concepts like budgeting, saving and investment planning.

Lack of financial owing to the need-based usage of money: Since most of the target audience fell below the poverty line, the sources of income are severely limited; while most of the families earn on a daily wage basis. Hence, financial planning seemed to be of no use to them.

Lack of awareness about the banking systemThe majority of the target groups are still unaware of the banking system and the advantages it offers.

Feeling of mistrust upon modern systems like Online Banking, UPI and CardsSince online forms of money exchange do not involve physically exchanging money, most families with low knowledge of technology felt the need for proof that the money has actually been exchanged, while also not believing upon instruments like digital records or digital bank statements.

Fear of the taxation systemIt is a common notion in underprivileged families that if they use the banking system, the government would heavily tax them and take a portion of their money away from them.

Prevalent habits of only using cash and investing in traditional avenuesMost people just do not want to switch as they have gotten habitual of the cash basis of exchange. They do not want to switch to some other medium. Similarly, for investments, most of the people prefer Gold and Land while ignoring stocks and mutual funds and terming them as “too risky”, “modern” and “only for the rich”