Financial Literacy Education and Responsibilities in Developing Countries Using a Computer Application

Abstract

The system of teaching financial literacy described in this paper has been developed by an undergraduate electrical engineering student, and the computer application by which it is taught and learned has been developed by an undergraduate software engineering student. This system illustrates the importance of household savings to people in developing countries. The system is actually a game that illustrates how placing a portion of family earnings into a savings account, along with prudent use of loans, can increase available household income over time. This system has been used in a community in rural Honduras composed almost completely of farming families who have access to a local micro-finance institution (MFI). After participating in a session of this financial literacy learning game, the participants had a better understanding of the foundational practices incumbent upon the proper management of household finances through an MFI. Developing this learning system into a computer application enhances and widens its usability in developing countries, particularly for non-governmental organizations (NGOs) that teach financial literacy. The importance of the computer application is that it incorporates the rules of the game, which are based on the financial principles required for the success of an MFI, and the rules also take into consideration those conditions unique to rural Honduras. Thus, NGO staff members can quickly learn this game and the principles upon which it has been developed and quickly master this learning system so it can employed in rural communities.