The ILO approach and experience in financial education

The ILO approach and experience in financial education Asian Seminar on Financial Literacy and Inclusion: Addressing the upcoming challenges Cebu, Philippines, 11-12 Sept 2012

Outline

Outline Why does the ILO talk about migration? The ILO rights-based approach on labour migration

Outline Why does the ILO talk about migration? The ILO rights-based approach on labour migration Financial education as a mean to fulfil the rights-based approach

Outline Why does the ILO talk about migration? The ILO rights-based approach on labour migration Financial education as a mean to fulfil the rights-based approach What makes a migrant worker different?

The rights-based approach to labour migration Core principle The key to the effective protection of migrant s rights lies in effective governance and regulation of migration A mandate given to the ILO since its foundation in 1919: (ILO Constitution) Reaffirmed by the Philadelphia Declaration, 1949

The foundation of the rights-based approach: International labour standards The international instruments guaranteeing human rights, including the rights of migrant workers: - Universal Declaration of Human Rights (UN General Assembly, 1948) - International Convenant on Economic, Social and Cultural Rights (UN General Assembly, 1966) - International Covenant on Civil and Political Rights (UN General Assembly, 1996) The ILO instruments applicable to migrant workers: - Core labour standards or fundamental conventions which apply to all persons, including migrant workers - Labour standards which apply to all workers in the workplace - Instruments dealing specifically with migrant workers

Policy measures targeting migrant workers and their families Objective: Strengthen the capacity of migrant workers and their households to make informed and rational choices about the use of remittances, leading to poverty alleviation Through: Transparency of information Customer protection Financial inclusion, incl. financial education Financial and non financial incentives for investments

Financial education as a mean to fulfill the rights based approach - Remittances as a Migrant workers right Conventions 97 and 143: «migrant workers have the right to transfer (part of) their earnings and savings through their preferred channel Multilateral framework for rights-based approach to labour migration (Migration International Labour Conference 2004) the contribution of labour migration to employment, economic growth, development and the alleviation of poverty should be recognized and maximized for the benefit of both origin and destination countries (Chapter IX). 2004 ILC Resolution, General discussion on migrant workers (par. 17): Promotion of policies that maximize the contribution of migration to development is another essential component of a comprehensive policy to address the global context of migration. Among urgent required components are measures to reduce the costs of remittance transfers as well as developing incentives to promote productive investment of remittances.

SFP Financial educa)on (FE) interven)on model WHAT DO WE DO? Enhancing financial capabili)es of target groups Development / adaptation of FE materials addressing needs of diverse target groups and contexts Training of trainers Training/counseling or (mass)media campaigns to equip target groups with financial knowledge, skills and tools Impact assessments to refine models EXPECTED OUTCOMES Workers, entrepreneurs, migrant workers & their families, farmers, families with working children, youth make informed decisions about earning, spending, savings, borrowing, using insurance, money transfers and other services In parallel strengthening the provision of financial services Technical assistance to Financial Service Providers (FSPs) for them to assess needs of clientele/target groups and develop relevant products Capacity building of FSPs to improve their performances and better manage products diversification FSPs offer credit, savings, insurance, money transfers and other products that meet the needs of target groups DEVELOPMENT OBJECTIVE Contribu)ng to Financial inclusion for social jus)ce Workers, entrepreneurs, migrant workers & their families, farmers, families with working children, youth... have: built their assets engaged into and taken advantage of income generating activities; or invested their wages protected themselves against risks (i.e. health, accident, disaster, overindebtedness ) Possibly combined with other support services (skills, BDS, migration) for a greater impact

What makes a migrant worker different? Migrant workers are not a homogenous group: Different literacy and numeracy levels Different habits on sending money home Different aims: consumption investment community development Different level of financial inclusion in the host country and for the family in the country of origin Different legal situation and levels of vulnerability Difference in the nature of migration: circular, 1st, 2cd.. generation..

The ILO experience in Financial education Financial education for migrant workers and their families: Trainers manual and Smart guide, Cambodia and Indonesia In English, Bahasa Indonesia, Khmer http://www.ilo.int/asia/ whatwedo/publications/ WCMS_171658/lang--en/ index.htm Building financial capability for the vulnerable households: A manual for individual training / counseling sessions in English and Romanian Financial education: Trainer s manual, Cambodia in English, Khmer, Mongolian, Bahasa Indonesia http://www.ilo.org/wcmsp5/ groups/public/---ed_emp/--- emp_ent/documents/publication/ wcms_116165.pdf Pocket Full of Change: Financial Education for Youth Trainer s Manual In English and Bahasa Indonesia Financial education for youth: Trainers manual and Trainee s guide, Nepal In English and Nepali http://www.ilo.org/wcmsp5/ groups/public/---asia/---robangkok/---ilo-kathmandu/ documents/publication/ wcms_153904.pdf Financial education for migrant workers in Europe and their families in West Africa In French

Tools that have been adapted taking into consideration : -Target groups: For youth: Nepal, Indonesia For women: Cambodia Mongolia, Indonesia For migrants and their families: Sénégal, Moldavia, Indonesia et Cambodia For MFI clients: Vietnam, Honduras, Cambodia For insurance compagnies clients: Kenya, Brasil, Colombia - Distribution channels: Through financial institutions MFIs, Banks, but also insurance compagnies Through NGOs, SMEs service providers Through public bodies Using the mass media

What results? Some results for the experience in Moldova: On the question on the use of savings, almost all beneficiaries understood at least 2 savings products and they knew which question to ask regarding deposit and savings accounts 74% understood main questions to ask while requesting a loan and 84% adopted the good practises to build a financial plan for their families Microfinance for Decent Work Action Research: Results based on RCTs and econometrical analysis for Cambodia (FE to loan officers of an MFI or directly to clients), and Vietnam (client training) showed strong impact on financial attitude, on repayment behaviour of clients, significant and positive impact on clients association if savings and security, on handling of debt.. Final results are to be shared soon: http://www.ilo.org/employment/areas/ social-finance/wcms_168033/lang--en/index.htm

Overview of the training modules for Senegal Introduction and methodology Set objectives and communicate well among the family (3 sessions, 250 min) Manage your budget wisely (5 sessions, 395 min) Use financial services and products (6 sessions, 545 min) Knowing and using financial institutions (5 sessions, 375 min) Using insurance and managing risk (4 sessions, 385 min)

Exemple du module B sénégalais

Delivery principles A modular approach: the training can be offered as a whole on a one week training but can also be tailored to the needs of the target population based on a selection of modules and adapted to mass media

Different options for delivery Group/collective option: Build networks of trainers : MFIs and banks, Public institutions, Leaders of migrants associations, Civil society (trade unions ) Mass option: Use of other delivery channels Radios (for instance community radios) CD/DVD using the national languages (telenovelas ), Applications for mobile devices, Internet (podcasts ).

Few challenges Continue adapting eventhough the key messages don t change Measure the impact Sustainability Financial education requires a global approach (with the use of different delivery channels) thus based on partnerships and shared respnsabilities

Thank you! Yousra HAMED hamed@ilo.org Social Finance Programme of the ILO www.ilo.org/socialfinance