Financial competence as a tool for poverty reduction : financial literacy and rural banking in the Pacific

Financial competence, the understanding of, attitude to and management of money, is a potentially powerful tool in the fight against poverty. A range of financial literacy and financial inclusion programmes targeted at the disadvantaged have been developed and implemented in several developed economies. However, to date few programmes to increase the financial competence of the poor have been implemented in developing economies. This paper outlines the financial competence construct and the role financial competence can play in poverty alleviation. It examines a successful multi-jurisdictional, financial literacy and financial inclusion collaboration between the United Nations Development Programme (UNDP) and ANZ Bank to enhance the financial competence of rural communities in the Pacific; and discusses the potential for replication in other contexts, and the implications for development actors, commercial organisations and regulators.