An S&P’s Study says that 75 percent of Indian adults are financially illiterate. And when it comes to children they are not taught the ABC of money management from an early age and as they grow up they add to this percentage. That’s why to make children financially responsible BITS Pilani and IIM alumni based in Hyderabad, launched India’s first debit-card for kids and teenagers to receive pocket money from their parents. We speak to the founder Vishwajit Pureti.
Excerpts:
How did you come up with the idea of Pencilton?
While studying MBA, we were taught concepts such as EMI calculation, time value of money, loan amortization, etc. There was a sense of cognitive dissonance as most people in my MBA class had already taken loans without much knowledge about any of this. A lot of my friends too shared that they don’t know how to manage money and still take help from their parents, who themselves are not confident of their money management skills.
That is when we came up with the idea of Pencilton last year. As parents anyway give monthly pocket money to kids, we wanted to build a platform that helps them use this pocket money to teach kids about money. Kids, who are very tech-savvy nowadays, also prefer digital means than cash to receive and spend pocket money because digital financial literacy is more important than just financial literacy. So we worked with RBL Bank to build a platform that lets kids and teens receive, save and spend their pocket money via a piggy bank, debit card, UPI and more, while helping parents teach kids and teenagers about money using savings challenges, reward-based chores and more.
Why did you choose the name Pencilton for the startup?
It is a portmanteau of the words Pencil and Newton (from Isaac Newton) as we wanted the name to stand for innovation, ingenuity (Newton) and for something that has stood the test of time, is familiar to kids and is still widely used after centuries of it’s innovation (Pencil).
Can children and money management go hand in hand with initiatives such as yours?
Yes, definitely. In fact, we feel children and money management HAVE to go hand in hand to inculcate healthy financially habits among the next generation. Kids and teenagers need not master money management. Introducing kids to money at a young age helps develop their financial skills. But more importantly, it also makes them more responsible, more organized and helps in cognitive development. This is definitely the only sustainable and scalable way to improve financial literacy in India.
Can this also be a behavioural study of the children’s spending habits? If yes, what are the findings?
Yes, it helps understand behavior of children as well as the ways in which we can inculcate healthier behaviors (both financial and lifestyle)
What can be a long-term investment for a child especially in these times when people are forced to be tight-fisted given the current bleak economic situation?
Setting up a ‘college fund’ to save for college expenses when the child comes of age; we are introducing a feature soon to help parents and kids do that same.
What are the provisions through this startup that can safeguard a child from being financially exploited?