Financial literacy and financial markets are rapidly changing,with developments in technology and new and more complex financial products.From different kind of loans to mortgages,the range of financial products people have to chose from has changes drastically from what it was in the past.the exponential hrwoth in fintech(financial technology) is revolutionizing the way people take financial decisions.Ability to effectively manage money and taking financial decisions in order to become financially self sustainable is known as financial literacy.
The OECD( organisation for economic cooperation and development)defines financial literacy not only as the knowledge of risks and management but also the skills.What does financial literacy involve:-From keeping tracks and understanding when to spend money how to spend money so that it does not have any negative impact on one’s life comes under financial literacy. Importance of financial literacy in a farmer’s life :- Financial literacy enables a farmer to develop a budgetary guide to distinguish what he owes,what he buys and what he spends.This can help them in becoming independent and self sufficient instead of debtors to banks or someone.
Understanding your money and knowing basic principles can prevent farmers from fraud as it will help them with foreseeing risks and argue with anyone learned and well informed.Hurdles in farmer’s way to achieve self sustainability :-Financial literacy can help farmers in many ways, but in india ,most of the farmers are illiterate who dont know how to read,never went to school hence they dont know basics things such as calculating interest adding amounts which plays a very big role in their lives.Because of lack of proper knowledge farmers usually become victims of fraud by money lenders.Money lenders charge a very hight amount of interest which is illegal but many farmers dont know that.Not only this there are many cases when a money lender charges money even though farmers have already paid it . There are many cases in india where farmers hang themselves to tree , burns themselves only because they get trapped in a debt trap and they dont know how to come out of it. There are cases like sanjeev bhatnagar vs union of india 2006, related to this matter but evern supreme court couldn’t do much then asking governments for reasons behind deaths and ordering them to take proper steps. So farmer have tk become self sustainable so that they can prevent themselves and their families from these.And to achieve this the only way is financial literacySolution :- Government should organise specialised programs at every panchayat where trained teachers can teach farmers about 1.Calculating interest to a given amount
2. Managing credit debit system
3. Different places from where they can get low interest loans
4.How to spend money and manage bills so that they dont have to face negative impacts.
5.Asset management. Risk managementThey can also teach them skills and how to apply them because there is no use of knowledge if you dont know how to apply it and where.With proper knowledge and understanding of credit debit system farmers can provide a major help in the growth of economy of india . No farmer will end up having a day with no food,no money or loss of thier land. This will be a concrete step towards the converting our developing nation into developed nation