About FEF

Why FEF was launched

It is estimated that around two-billion people in the developing world are financially excluded people. In many parts of Africa, more than 80% of the population do not have access to basic financial services or fail to provide for large or unexpected expenditures and retirement. Surveys indicate that one of the reasons for this is a lack of financial capability, which can be defined as both an understanding of financial topics and the ability to put that knowledge into practice.

Lack of financial capability is complicated by changing financial markets. More products with greater complexity are becoming available to low-income clients. The mobile revolution is connecting millions to the formal economy bringing mobile financial services within their reach. Yet, research shows that many people either do not know how to use these services, or distrust them. And when something goes wrong, they do not know what to do to obtain redress. As such, low levels of financial literacy are hampering financial inclusion efforts in many African countries.

Why is financial capability important?

Improved financial capability and literacy will not only improve the welfare of low-income households, but will lead to a stronger financial sector and macro-economic benefits. Access to services such as banking, savings and credit is key to economic development, and therefore to reducing poverty in Africa.

One of the ways to improve financial capability is through financial education. FEF has been formed to catalyse financial education initiatives in selected African countries.

The FEF will also work with policymakers, regulators and industry associations to support national policymaking and co-ordination on financial education.

Donors and fund management

FEF is conceived as a multi-donor fund, with an initial start-up capital from the UK´s Department for International Development (DFID) over three years. It is managed by a partnership comprising the Emerging Markets Group and Genesis Analytics, and run from the Genesis offices in Johannesburg, South Africa.