Sunday, June 19, 2011

Mallus and money

Literacy levels in Kerala are very high. Among the highest in India at 93.91 per cent according to the latest census. Kerala also has nine universities and 300-plus colleges. So it would be safe to say that a good number of people in Kerala have college degrees.
Yet, people in the State seem to fall for all sorts of financial scams; from money chains to fly-by-night chit funds. The latest being an alleged real estate scam.
Why does this happen? Why is it that people who are among India’s most literate, educated and aware, don’t seem to be able to figure out what’s a con and what’s not.
One reason for the Malayalee’s susceptibility to financial scams, I guess, is a basic human instinct — the desire to get rich quick. So something that promises to double or treble money in a jiffy breaks through all notions of caution.
More important though, I believe, is our lack of Financial Literacy. Most of us just don’t get even the basics of finance; so the more complex stuff goes right over our heads. As the recent global economic crisis illustrated, we’re not alone in not being able to come to grips with the nuances of finance. But that’s no consolation at all.
What Kerala, and indeed India, needs is a new movement — for total financial literacy. A movement that gives us tools to understand and manage our finances and the skills to see through scams.
Financial literacy even needs to be a part of the ‘life skills’ courses that are increasingly being taught in our schools and colleges. For I really can’t think of a greater ‘life skill’ than the ability to understand money and how to manage it. Perhaps it’s time we established a Financial Literacy Mission.


Karthika Naïr said...

Financial literacy has indeed become one of the essential life skills in the world we try to occupy. But how many of us actually have it? Is we did, would the great crashes and scams of the last few years actually have happened? I mean, even governments seem gauche and gullible faced with the labyrinths of high finance.

It would be interesting to map out just how this particular subject/skill can be taught. Where do you begin? And who teaches it?

Sankar Radhakrishnan said...

@karthika: Exactly the point i'm making. All of us need to become financial literate; at least the basics. Then, perhaps, we will be less prone, as individuals, to falling for all sorts of scams. And this might translate into system-level caution against the more esoteric financial products.
I think we should start right away in schools or at least in colleges. As a mandatory subject. For older people, i believe there are already some programmes in FinLit, whose outreach needs to be increased.

Mee said...

Is there any correlation between Literacy and novice? Or Literacy and Con?

And its humans who are universally susceptible to the greed/yearning of wanting to become rich overnite.

"paise ke liyae kuch bhi karega saala..' remember this famous line? Guess its true for a large portion of our universe.