How one man is bringing financial literacy to rural villages in Nepal
I’ve spent my career thinking about how to help everyday people take stock of their financial lives here in America. But now that my best-selling book Make Your Kid a Money Genius (Even If You’re Not) has been translated into Japanese, Mandarin, and Arabic (and more!), I’ve been learning what money means to people around the world. Which is why I was so excited to meet Prakash Koirala last fall at the CEE Annual Financial Literacy and Education conference. Prakash, an animated, focused young man from Nepal, spearheads a financial literacy effort called FinLit Nepal—for which he has given a TEDx talk and received the Financial Innovation Award from the London Institute of Banking and Finance.
To start off, can you tell me what FinLit Nepal does?
We organize workshops in communities across Nepal, typically in rural villages where many of the people do not participate in the formal banking system due to lack of information. Our goal is to not only show them how to best manage their money, but also to get them to deposit any savings into secure financial institutions, and eventually to understand how loans work so that they can invest in producing value for themselves—like buying farming tools and seeds to grow their own food.
I’ve seen World Bank estimate that some two billion people have no access to the financial system. Even in a country as prosperous as the U.S., about 20 million are unbanked. How did you decide to tackle this problem?
Despite growing up in a very middle-class family, I saw the difficulties that people around me were facing. I met people who were unable to enjoy their lives because of money. And people who, even if they were earning enough, didn’t know how to manage it. In 2009, I had the idea of a pilot project to see what kind of impact a workshop could have in a rural village. I spent a month in Chainpur, very far from the capital city of Kathmandu, working with a community group. By the end of the month, I decided that the impact was enough for me to continue this campaign—which has expanded into what I do now with FinLit Nepal.
What do you do in these workshops to help change the way people manage money?
During the first three-hour workshop, we give everyone a piggy bank so they can start saving. After a month, we follow up and help them break their piggy banks and whatever amount they have in there, we help them deposit into a formal bank. The next month, we help them prepare a business plan through the nearest banking institution—the goal here is to become self-sufficient in generating income.
Microfinancing is expanding here in Nepal, where banks provide loans with no collateral to help alleviate poverty and promote small-business growth. We are trying to build an ecosystem where community groups can obtain these loans but with the proper guidance and mentorship.
The piggybank idea sounds so simple but so powerful. Who participates in your workshops?
In most of the villages we visit, men are the main actors in earning income for the family. This leaves women out of the decision-making process. We’ve seen many women enroll to become more involved with personal finance and learn lessons that they are traditionally left out of, and we often hold open workshops specifically for women.
Makes sense—the vast majority of the unbanked are women. What are some of the other challenges you’ve come across?
The biggest challenge for us is that there is no national strategy for financial literacy across Nepal. They aren’t directing resources toward figuring out how to disseminate information to rural parts of Nepal. Access to some financing may exist, but people don’t know how to use it. Another huge hurdle is that many people in rural Nepal are illiterate. That makes it very difficult to share information, so we have to come up with different tools that are user-friendly. For example, I created a comic book called Finlico using mostly images to demonstrate financial concepts.
What a creative way to confront that challenge. Once the information is out there, are you seeing a positive effect?
One time, I was in a district called Kailali in the northern part of Nepal. I was running an open class for mostly women, but I noticed an elderly man sitting quietly just behind the classroom. After the class, the man—he must have been at least 65—came up to me and asked me to wait, and then left. I was very confused. But a few minutes later, he came back and handed me $500 in cash. He asked me, how can I save this money in a bank? That day, I took him to the nearest bank and helped him deposit it. I also directed him to keep a financial diary to track his spending.
That’s the power of financial literacy—it really can change lives.
After a month, he was earning interest!
(This conversation has been edited for length and clarity.)