25 pairs of eyes, weary of being cheated, hopeful for a better tomorrow were staring at us, trying to discern if we too will run away with their money. This is how our first group session on financial management, for the parents of children studying in St. Stephen’s school, started.
We held it on 2nd of this month, in association with Hamara Footpath and Rotary Club (Bombay North), in line with our vision of catering to the ‘wealth’ management needs of the people lying at the BoP (Base of the Pyramid).
The most obvious question that would come to your mind after reading the above is – do these people have any money, let alone wealth, which can be managed? You are right, they barely have any savings. This is exactly why we started our session emphasizing on why one should save and plan for long term goals. The habits they can inculcate in their day to day life, the different modes of saving, the importance of having a bank account and different avenues for investing those savings were some of the other key topics we focused on.
We let the content be informed by our previous interactions with the people from similar income group and backgrounds. Accordingly, we tried to break down complex procedures into steps, gave them ‘5 quick tips’ for saving and even showed a video based on a real life story of a woman who started her own business with the help of a microfinance institution.
As the session progressed and we started talking to them about why they should save and what can they do to start cultivating the saving habit, they started opening up and asking some very interesting questions. When we introduced the concept of mutual funds to them they started sharing their concerns and past experiences of losing their money in ponzi schemes and chit fund scams. We were shocked to see that almost everyone had lost some money, from INR 50,000 – 400,000. That is when the magnitude of the problem really dawned upon us. The eyes that we saw at the beginning of the session, were weary from being repeatedly cheated upon.
It was slightly challenging for us to assure them that mutual funds are safe investment vehicles and that as an industry, it is highly regulated. However, it seemed like we were able to win their trust as a lot of people came up to us after the session to know more about it and expressed their interest in investing through SIPs. One among them expressed how relieved she felt to have acquainted someone who could understand her financial woes and asked for our help to recover her mother-in-law’s money stuck in one of the mutual fund schemes. Once we receive details from her, we intend to get to the root of the problem and help her as much as possible. Last week, I was speaking to one of the attendees, Sarita about the launch of government’s health insurance scheme in Maharashtra and how she can get her family covered under it when she mentioned that she has already started investing INR 1000 per month through SIPs in mutual funds for a year!
Even though the lives of the urban poor, the slum dweller, is well documented there is a dearth of data on their finances. We decided to distribute a questionnaire at the end of the session to collect data so that we can understand them better. We’ll be sharing the data insights in another post. We also gave them an income-expense tracker to help them hold themselves accountable for every expense they make, enabling them to ingrain the saving habit into themselves.
Through the session we interacted with 25 people, but got an opportunity to impact multiple lives – their spouse, children, neighbors, relatives, etc. Creating a change in others lives is like an earthquake. Tremors ripple away from the epicenter to far away places. We really hope we hit a 10 on the Richter scale!