Mozambique: Increasing financial knowledge and creating trust

Fernando is a hard-working construction worker who lives in a small village in the interior of Mozambique. He doesn't have a bank account and in order to cash his modest wages, he has to travel four and a half hours one-way to reach the nearest town. The round trip costs Fernando about 6.5 percent of his wages. In industrialized countries, that’s almost equivalent to the amount employers pay into their employees' retirement funds.

Fernando’s story is common among people in Mozambique: the vast majority has no – or only limited – access to financial service. According to a2009 study, less than a quarter of the population have their own bank account. In fact, Mozambique has the highest rate of so-called “financial exclusion” in southern Africa.

This is because banks and ATM machines are often located far from the villages. But, says DW Akademie project manager, Helena Ferro de Gouveia, it is also because people in Mozambique “lack confidence in banks and financial transactions, and don’t understand the opportunities and risks of financial services.”

Only one in ten people in the country, for example, understand terms such as interest rates, loans, savings, insurance, foreign exchange rates, inflation, and money transfers.

To help change this, DW Akademie and the International Capital Corporation (a Mozambique consultancy specialized in small and medium enterprises) are jointly running an 18-month-long project called “Dinheiro Esenvolve” or "Money Matters". The project starts in mid-May with a goal to improve financial literacy, reduce skepticism about banks and money transactions, and help protect consumers. The project is funded by the Central Bank of Mozambique and the German development bank, KfW.

“The aim is to break down prejudices and fears by providing access to reliable information,” says Michael Tecklenburg, head of DW Akademie's Africa team. “But the project is also about strengthening coverage of financial topics, and educating consumers so that they’re able to make informed decisions.” To this end, DW Akademie will also be training selected journalists on how to report on financial topics – mainly from a consumer perspective.

In Mozambique almost all information that relates to financial services is produced by the service providers themselves. The result is that people have little confidence in their products. The project will therefore be looking at producing easily accessible, reliable information that consumers can trust.

Various media formats will be used in order for education content to reach the project's target group: poor populations in rural as well as urban areas.

A multi-part radio play, broadcast in various regional languages as well as in Portuguese, will be produced in cooperation with media partners in Mozambique. The format, which blends entertainment and information, has proven successful in similar DW Akademie projects.

“Radio is the best way to reach the rural population, and that’s why we’ll be focusing primarily on the radio play,” says Christopher Springate, who is managing DW Akademie's contribution to the Dinheiro Esenvolve project.

A movie connected to the play will also be produced and be broadcast by public and private television stations and go on tour around the country. A picture book containing the campaign's key messages will also be used to reach illiterate members of the target group.