that financial consumer protection regulation in low-access environments should make sure that plain language is used and that the use of complex formulas and calculations is avoided. Other studies (Collins _et al._ , 2009, and FSD-Kenya, 2009) support this claim. For example, consumers prefer and better understand when they are quoted the dollar amount of payments and the number of months it will take them to pay off the loan, instead of the details of compounding. However, certain products are necessarily more complex and will require more information to be disclosed, though in the absence of financial literacy, it is unlikely that this complex information will be understood by the consumer. For example, a U.S. Government Accountability Office (GAO) study finds that people with limited language proficiency are less likely to have bank accounts and more likely to be susceptible to fraudulent practices (US GAO, 2010). In an earlier study on review of regulations on the disclosure of rates and fees, the U.S. GAO (2006) comes to a conclusion that disclosure forms are complicated, and may contain conflicting information, confusing disclaimers.

Unfortunately systematic data on the levels of financial literacy and awareness of financial concepts remains limited. Lusardi and Tufano (2009) present the results of a household survey in the U.S. and find that awareness of financial concepts among borrowers is low, especially among women, elderly, and minorities. The authors find that borrowers with lower levels of financial literacy tend to transact in high-cost manners such as incurring fees. Based on household interviews in Australia, Wilson _et al._ (2009) report similar findings and suggest that low income consumers are not only more likely victims of abuse by lenders, but they are also less aware of consumer protection provisions and their rights to seek recourse.

Policy papers focusing on the review of consumer protection and financial literacy indicate that there is no one-size-fits-all approach when it comes to designing consumer protection and financial literacy policy. Financial literacy is low among the poor, especially in developing countries (Miller _et al._ , 2010). There is evidence that individuals lack even the understanding of interest rates (Porteous, 2009; FSD-Kenya, 2009).<sup>6</sup> Porteous and Helms (2005) note the large asymmetry between borrowers and lenders in microfinance in terms of awareness of the financial product or service, arising from illiteracy and inexperience on the part of borrowers, and differences in language and ethnicity. In this respect, providing financial education to the poor to raise their financial capability and establishing better consumer financial protection regulations may turn out to be a better option. Indeed, there is evidence that disclosure requirements lowered microfinance interest rates significantly in countries with competitive microfinance markets such as Cambodia, Peru, Ghana, many countries in Eastern Europe and the former Soviet Union where new price disclosure requirements are enforced (Brix and McKee, 2010).

> 6 This issue is not confined to developing countries. For example, US GAO (2005) reports similar findings regarding APR.

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