Zerodha Varsity has launched Varsity Junior to teach kids as young as eight-year-olds different financial concepts. The initiative is being launched with a video series, that is distinctly reminiscent of the popular 1980s serial ‘Malgudi Days’ (based on R. K. Narayan’s novel ;Swami and Friends').
“We wanted to give a very warm feeling. All of us love ‘Malgudi Days’. So, we wanted to give ‘Malgudi Days’ kind of vibe to the entire thing," says Karthik Rangappa, vice-president, education services, Zerodha.
It is no coincidence that the name of the protagonist in the first episode of Varsity Junior is Mani.
Why teach kids now?
Varsity Junior is focusing on small kids that are 8-year and above. But are these kids investment ready, when they are just learning to count numbers in their schools? Why teach them now?
“The idea behind Varsity Junior is not focused on investments, but it is to lay down building blocks of financial literacy in the minds of young Indians early on in their lives and some of these concepts can also be applied to other aspects of their lives," Rangappa says.
This is not first time, Zerodha Varsity is experimenting with content for this age-group. In 2016, it published Rupee Tales, a set of five illustrated storybooks, explaining the basic concepts of finance such as a banking, savings, insurance, taxes, etc. in a slice-of-life, light-hearted stories.
But after Covid-19, Rangappa says video became the primary source of content consumption and that’s when Zerodha Varsity decided to expand on Rupee Tales and come up with a video format, and the idea of Varsity Junior was born.
“Our idea is to tell a simple story to children and therein bake in a financial lesson. For the children watching the story, it is like any other children’s story. They wouldn’t even know that this story meant specifically for ‘financial’ lesson right till the very end. As the story unfolds, it starts to culminate into a financial lesson," Rangappa says.
Varsity Junior is planning to release 15-20 videos in the coming days. The first episode ‘Ideas by the lake’ expounds on the idea of compounding through a story where Mani and his friends are looking for ways to getting rich.
What about the math?
All financial concepts are ultimately backed by hardcore math. Can children as young as 8-year-old understand the math that goes behind a concept like compounding?
Rangappa says that it is not so important to know the math that goes behind these financial concepts, as long as one knows how it can impact your life and how you can use that concept.
“For your day-to-day living, you don't have to know the math. You only need to know what compounding is and what impact it has on your investments and how you can use it. You don’t need to know how compounding is mathematically derived. If you eliminate that part and stick to the practical aspect, then it becomes fairly easy," he says.
“If you start talking about the math involved, present value, future value of money and all that stuff, then you’d end up losing 90% of your audience," Rangappa points out.
No money-experience
Most kids in the 8-year-plus age-group are less likely to have any access to money, except for some pocket-money in few cases.
How can children be taught about money without experiencing it?
Rangappa agrees this can be a problem, but it is a hard problem to solve. “It has to come from the parents. Parents have to make up their mind and start giving some money, as well as ensure that the money is used in the right way. So, all that we can do as financial literacy providers that once that money is given it is utilized in the right way," he says.
ZuPay, which is an investment of Zerodha’s venture capital (VC) arm Rainmatter, has built in a feature where parents can approve initial investments of their kids. But ZuPay is focusing on teenagers and not the small age-group that Varsity Junior is looking at. Teenagers are still more likely to get some pocket-money from their parents.
Savers of tomorrow
Most other brokers Mint spoke to, have not yet started to create content for children as small as 8-year-plus.
There have been some initiatives, but these are focused on teenagers and young adults.
Education and financial literacy have always been part of Zerodha’s journey right from its start. In 2010, Zerodha was launched and Zerodha Varsity was launched in 2014. Nithin Kamath, founder of Zerodha also regularly writes on various financial topics on his blog and Twitter.
In a recent tweet, he pointed out that if basics of finance were taught early in school, children are more likely to remember them and draw on these lessons when they grow up. His tweet was in response to an issue raised in parliament by BJP Lok Sabha member Tejasvi Surya, who pointed out that due to lack of financial literacy in formal school education system, young Indians were not equipped with the right money management skills when they entered the job market.
While it may not be the focus of Zerodha, but the by-product of its initiative is likely to be mindshare in tomorrow’s investors and savers. Children with their impressionable minds tend to remember the brands they engage with at such a young age. But more importantly, better-informed children will be better-informed savers and investors tomorrow, who can plan for their retirement and avoid falling prey to fraudulent schemes.
The government can make the biggest impact by incorporating personal finance lessons in children's textbooks, as part of their syllabus. This will inculcate basics of financial planning, saving, spending habits, etc. early on in children and make them better-prepared to manage their own finances when they grow up.
