Financial Literacy training – An innovative project in Tonga

Many women in the developing nation of Tonga seem to have the same vision for their family: education for their children so they will have a better chance at life, and economic security for their family. Or so say the members of South Pacific Business Development Microfinance, Ltd. (SPBD)! This is where the skill of managing a household’s resources comes in. Good money management is needed for families, and in Tonga it is primarily the women who act as financial managers. They have to meet their family’s daily needs, while dealing with daily ins and outs and unexpected emergencies. They have to take advantage of opportunities and plan for the future all at the same time.

Knowing how much money you actually have is an important part of good money management. Recording your cash flow is a basic activity that isn’t practiced by most women in Tonga – particularly the poor – since they say that their expenses are too few to list. But tracking cash flow allows saving when possible, avoiding unnecessary expenses and using what little money is left wisely.

SPBD Tonga has recognized the importance of financial literacy as a tool to advance its social mission – to improve the lives of marginalized women. It has recently started an innovative program with the support of Good Return, aiming to build the capabilities of its members in handling their finances. The program is a mix of training, hands-on application of financial diaries and weekly coaching activities on good money management practices.

SPBD’s financial literacy program’s pilot implementation was started in June 2012. The first step was training the field staff, who are now the main trainers and facilitators in the branch centres. By July, the pilot project had five centres participating in financial literacy and cash flow management. Since then, ten additional centres have joined, representing a total of 291 clients trained over the 15 centres.

The end of the pilot project is fast approaching in December of this year. SPBD and Good Return are already receiving feedback and ‘lessons learned’ from the field – as well as the first success stories!

One success story in particular is from the Vaini centre which received the award for Best Practicing Centre within the Financial Literacy Program (FLP) pilot project.

One of the clients (pictured on the right) shared her story on how she improved her spending habits while still keeping her kids satisfied. She told us she was used to frequently buy lollies and sweets for her kids, while they were also asking for a bag of apples. She hadn’t wanted to buy a whole bag of apples because the price per kilo seemed too high. But when her financial diary showed that she was spending even more on the sweets, she immediately switched. Her conclusion: “I am saving money and my kids have healthier snacks!”

As SPBD’s clients improve their money management skills, we at Good Return are looking forward to hearing more success stories like this one!

Good Return is an initiative by World Education Australia, combining microfinance with education to create long term lasting benefits for the working poor in the Asia Pacific. Good Return works with partners in Nepal, the Philippines, Cambodia, Indonesia, Laos, Fiji and Tonga on programs such as Sustainable Livelihoods program for the MFI clients, Capacity Building program for our MFI partners and Sustainable Energy program. Good Return also gives the opportunity to the public to connect with the working poor in the Asia Pacific. Through our platform, individuals can make a small loan to a woman so she can grow her business, increase her income, and lift herself out of poverty.

Find out more at  www.goodreturn.org.

SPBD (http://www.spbdmicrofinance.com/) is a network of microfinance organizations working in Fiji, Samoa, Tonga, and Solomon Islands dedicated to eradicating poverty by empowering women in poor rural villages with the opportunity to start, grow and maintain sustainable, income generating micro-enterprises.